The following information pertains to the Vertigo Company:
$\begin{array}{ll}
\text { Total assets } & \$ 150,000 \
\text { Total current liabilities } & \$ 110,000 \
\text { Total expenses } & \$ 70,000 \
\text { Total liabilities } & \$ 115,000 \
\text { Total revenues } & \$ 80,000
\end{array}$
Return on sales equals ________.
A) 12.5%
B) 50.0%
C) 75.0%
D) 133.0%

Question

Quizplus · Accepted Answer

Return on sales is calculated as Net Income divided by Total Revenues. Net Income is Total Revenues minus Total Expenses, which is $80,000 - $70,000 = $10,000. Therefore, Return on Sales = $10,000 / $80,000 = 0.125 or 12.5%.

The Following Information Pertains to the Vertigo Company Return on Sales Equals ________