timer Asked: Jun 29th, 2013

Question description

(Profitability analysis) The R. M. Smithers Corporation earned an operating profit margin of 10% based on sales of $10 million and total assets of $5 million last year.

  1. What was Smithers’ total asset turnover ratio?
  2. During the coming year, the company’s president has set a goal of attaining a total asset turnover of 3.5. How much must firm sales increase, other things being the same, for the goal to be achieved? (State your answer in both dollars and the corresponding percent increase in sales.)
  3. What was Smithers’ operating return on assets last year? Assuming the firm’s operating profit margin remains the same, what will the operating return on assets be next year if the total asset turnover goal is achieved?

Tutor Answer

(Top Tutor) Studypool Tutor
School: New York University
Studypool has helped 1,244,100 students
flag Report DMCA
Similar Questions
Hot Questions
Related Tags

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors