Sales Net income (after taxes) Assets Medical Supplies $ 20,400,000 2,190,000 8,590,000 Medical Supplies Heavy Machinery Electronics a-1. What is the return on sales for each subsidiary? Note: Input your answers as a percent rounded to 2 decimal places. Heavy Machinery $ 5,600,000 270,000 8,360,000 Return on Sales % % % Electronics $ 4,920,000 322,000 3,330,000
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
The return on sales is the measure of a company’s profitability as it shows how much of the revenue is converted into profits.
The return on assets is the measure of the efficiency of the company as it shows how well the assets owned by the company are used in generating profits.
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