A company had net income of $43,000, net sales of $380,500, and average total assets of $220,000. Its profit margin and total asset turnover were, respectively:
A) 11.3%; 1.73.
B) 11.3%; 19.5.
C) 1.7%; 19.5.
D) 1.7%; 11.3.
E) 19.5%; 11.3.

Question

Quizplus · Accepted Answer

Profit Margin = Net Income / Net Sales = $43,000 / $380,500 = 0.113 or 11.3%

Total Asset Turnover = Net Sales / Average Total Assets = $380,500 / $220,000 = 1.73

Therefore, the correct choice is A) 11.3%; 1.73.

A Company Had Net Income of $43,000, Net Sales of $380,500