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1)Kurtz Logistics provides the following information:
| Operating income | $1,600,000 |
| Net sales | $15,000,000 |
| Average total assets | $2,000,000 |
| Management’s target rate of return | 25% |
What is the company’s profit margin ratio? (Round your answer to one decimal place.)
2)Trainor Logistics provides the following information:
| Operating income | $1,550,000 |
| Net sales | $13,500,000 |
| Average total assets | $2,000,000 |
| Management’s target rate of return | 25% |
What is the company’s return on investment? (Round your answer to two decimal places.)
Expert Answer
| 1 | ||||||||
| Profit margin ratio= Operating income/Net sales = 1600000/15000000= | 10.7% | |||||||
| 2 | ||||||||
| Return on investment = Operating income/Average total assets = 1550000/2000000= | 77.50% | |||||||
