Dulaney's Stores has posted the following yearly earnings and expenses. A) Dulaney's current profit margin is %?? Dulaney's current yearly ROA is %?? B)Suppose COGS and merchandise inventory were each cut by 10% The new pretax profit margin is %?? The new ROA is %?? Based on the current profit margin in part a., Dulaney would have to generate$ ?? in additional sales in order to have the same effect on pretax earnings as a 10% decrease in merchandise costs.
Dulaney's Stores has posted the following yearly earnings and expenses. A) Dulaney's current profit margin is %?? Dulaney's current yearly ROA is %?? B)Suppose COGS and merchandise inventory were each cut by 10% The new pretax profit margin is %?? The new ROA is %?? Based on the current profit margin in part a., Dulaney would have to generate$ ?? in additional sales in order to have the same effect on pretax earnings as a 10% decrease in merchandise costs.
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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Dulaney's Stores has posted the following yearly earnings and expenses.
A) Dulaney's current profit margin is %??
Dulaney's current yearly ROA is %??
B)Suppose COGS and merchandise inventory were each cut by 10%
The new pretax profit margin is %??
The new ROA is %??
Based on the current profit margin in part a., Dulaney would have to generate$ ?? in additional sales in order to have the same effect on pretax earnings as a 10%
decrease in merchandise costs.
Transcribed Image Text:More Info
Earnings and Expenses (Year Ending January 2012)
$63,000,000
Sales
Cost of goods sold (COGS)
Pretax earnings
Selected Balance Sheet Items
Merchandise Inventory
Total assets
Done
$43,000,000
$5,481,000
$2,740,500
$10,000,000
- X
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