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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%;8
b.) 
2.5%;8
c.) 
5%;1.1
d.) 
2.5%;1.1

A company has the following information: the net operating income is $100,000 \$ 100,000 , net sales are $2,200,000 \$ 2,200,000 , and operating assete are $2,000,000 \$ 2,000,000 .\newlineCalculate the return on operating assets and the turnover of operating assets.\newlinea.) 5%;8 5 \% ; 8 \newlineb.) 2.5%;8 2.5 \% ; 8 \newlinec.) 5%;1.1 5 \% ; 1.1 \newlined.) 2.5%;1.1 2.5 \% ; 1.1

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Q. A company has the following information: the net operating income is $100,000 \$ 100,000 , net sales are $2,200,000 \$ 2,200,000 , and operating assete are $2,000,000 \$ 2,000,000 .\newlineCalculate the return on operating assets and the turnover of operating assets.\newlinea.) 5%;8 5 \% ; 8 \newlineb.) 2.5%;8 2.5 \% ; 8 \newlinec.) 5%;1.1 5 \% ; 1.1 \newlined.) 2.5%;1.1 2.5 \% ; 1.1
  1. Calculate ROOA: Calculate the return on operating assets (ROOA). ROOA is calculated by dividing the net operating income by the operating assets. ROOA=Net Operating IncomeOperating Assets=extextdollar100,000extextdollar2,000,000\text{ROOA} = \frac{\text{Net Operating Income}}{\text{Operating Assets}} = \frac{ ext{ extdollar}100,000}{ ext{ extdollar}2,000,000}
  2. Perform ROOA calculation: Perform the calculation for ROOA.\newlineROOA = $100,000/$2,000,000\$100,000 / \$2,000,000\newline= 0.050.05\newlineTo express this as a percentage, we multiply by 100100.\newlineROOA = 0.05×1000.05 \times 100\newline= 5%5\%
  3. Calculate turnover of assets: Calculate the turnover of operating assets. Turnover of operating assets is calculated by dividing net sales by operating assets. Turnover=Net SalesOperating Assets=$2,200,000$2,000,000\text{Turnover} = \frac{\text{Net Sales}}{\text{Operating Assets}} = \frac{\$2,200,000}{\$2,000,000}
  4. Perform turnover calculation: Perform the calculation for the turnover of operating assets. Turnover=$2,200,000$2,000,000\text{Turnover} = \frac{\$2,200,000}{\$2,000,000} = 11.11
  5. Match calculated values: Match the calculated values to the given options.\newlineWe have calculated:\newlineROOA=5%ROOA = 5\%\newlineTurnover=1.1Turnover = 1.1\newlineThe option that matches our calculations is:\newlinec.) 5%5\%; 1.11.1

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