A company has the following information: the net operating income is $100,000, net sales are $2,200,000, and operating assete are $2,000,000.Calculate the return on operating assets and the turnover of operating assets.a.) 5%;8b.) 2.5%;8c.) 5%;1.1d.) 2.5%;1.1
Q. A company has the following information: the net operating income is $100,000, net sales are $2,200,000, and operating assete are $2,000,000.Calculate the return on operating assets and the turnover of operating assets.a.) 5%;8b.) 2.5%;8c.) 5%;1.1d.) 2.5%;1.1
Calculate ROOA: Calculate the return on operating assets (ROOA). ROOA is calculated by dividing the net operating income by the operating assets. ROOA=Operating AssetsNet Operating Income=extextdollar2,000,000extextdollar100,000
Perform ROOA calculation: Perform the calculation for ROOA.ROOA = $100,000/$2,000,000= 0.05To express this as a percentage, we multiply by 100.ROOA = 0.05×100= 5%
Calculate turnover of assets: Calculate the turnover of operating assets. Turnover of operating assets is calculated by dividing net sales by operating assets. Turnover=Operating AssetsNet Sales=$2,000,000$2,200,000
Perform turnover calculation: Perform the calculation for the turnover of operating assets. Turnover=$2,000,000$2,200,000 = 1.1
Match calculated values: Match the calculated values to the given options.We have calculated:ROOA=5%Turnover=1.1The option that matches our calculations is:c.) 5%; 1.1
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