ccording to the balance sheet of Free Inc, at the end of the 2020 fiscal year, the cash balance is $200,000, account available balance is $500,000, inventory balance is $750,000; the net fixed asset is $1,500,000. On the other side, the account payable is $250,000, the accrual $40,000, the notes payable is $300,000, long-term debt is $510,000, common stock is $1,200,000, retained earnings is $650,000. The net income is $900,000; the interest payment is $45,600; the tax rate is 25%. If the sales is $10,000,000, what is the operating margin? b. 13.26% c. 11.45% d. 10.66%
ccording to the balance sheet of Free Inc, at the end of the 2020 fiscal year, the cash balance is $200,000, account available balance is $500,000, inventory balance is $750,000; the net fixed asset is $1,500,000. On the other side, the account payable is $250,000, the accrual $40,000, the notes payable is $300,000, long-term debt is $510,000, common stock is $1,200,000, retained earnings is $650,000. The net income is $900,000; the interest payment is $45,600; the tax rate is 25%. If the sales is $10,000,000, what is the operating margin? b. 13.26% c. 11.45% d. 10.66%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
According to the
$200,000, account available balance is $500,000, inventory balance is $750,000; the net fixed
asset is $1,500,000. On the other side, the account payable is $250,000, the accrual $40,000, the
notes payable is $300,000, long-term debt is $510,000, common stock is $1,200,000,
earnings
is 25%. If the sales is $10,000,000, what is the operating margin?
b. 13.26%
c. 11.45%
d. 10.66%
Expert Solution
Step 1
Operating margin is the operating income available against the sales of the company and it show how much is cash income available to company.
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