Financial Accounting

Learn the toughest concepts covered in your Financial Accounting class with step-by-step video tutorials and practice problems.

Financial Statement Analysis

Ratios: Profit Margin x Asset Turnover = Return On Assets

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Ratios: Profit Margin x Asset Turnover = Return On Assets

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Problem

XYZ Company had a profit margin of 8.8% and total asset turnover of 0.77. What is XYZ’s Return on Assets?

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Problem

A company had a profit margin of 6.1%. The company’s net sales were $3,600,000 and Cost of Goods Sold was $600,000. If total assets were $3,450,000 at the beginning of the year and $4,210,000 at the end of the year, what is the company’s return on assets?