James builds brick walls for custom homes. His annual sales are approxi-mately $300,000, and his net income is $18,000. He has assets of $100,000 invested in this business. Tom sells window shades. His annual sales are approximately $900,000, and his net income is $27,000. He has assets of $150,000 invested in his business. Compute the net profit margin for both James and Tom. Compute the asset turnover for both James and Tom. Compare the profitability of these two firms, and discuss the similarities and differences.
James builds brick walls for custom homes. His annual sales are approxi-mately $300,000, and his net income is $18,000. He has assets of $100,000 invested in this business. Tom sells window shades. His annual sales are approximately $900,000, and his net income is $27,000. He has assets of $150,000 invested in his business. Compute the net profit margin for both James and Tom. Compute the asset turnover for both James and Tom. Compare the profitability of these two firms, and discuss the similarities and differences.
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 59P
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James builds brick walls for custom homes. His annual sales are approxi-mately $300,000, and his net income is $18,000. He has assets of $100,000 invested in this business. Tom sells window shades. His annual sales are approximately $900,000, and his net income is $27,000. He has assets of $150,000 invested in his business.
- Compute the net profit margin for both James and Tom.
- Compute the asset turnover for both James and Tom.
- Compare the profitability of these two firms, and discuss the similarities and differences.
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT