The records of Milwaukee Sprinkler Systems report net sales of $500,000,net income of $150,000 and average total assets of $330,000.Using DuPont analysis,calculate the two ratios used for return on assets.
A)Net profit margin ratio is 29% and Total asset turnover is 1.52.
B)Net profit margin ratio is 30% and Total asset turnover is 1.52.
C)Net profit margin ratio is 28% and Total asset turnover is 1.55.
D)Net profit margin ratio is 27% and Total asset turnover is 1.52.

Question

Quizplus · Accepted Answer

Net profit margin ratio is calculated as Net Income / Net Sales = $150,000 / $500,000 = 30%. Total asset turnover is calculated as Net Sales / Average Total Assets = $500,000 / $330,000 = 1.52.

The Records of Milwaukee Sprinkler Systems Report Net Sales of $500,000,net