Videos
Concept Introduction:
Return on total assets:
Return on total assets is known as profitability measurement which is calculated on the basis of net income and average total assets. This ratio helps in knowing the
Profit margin:
Profit margin refers to a profitability measurement which helps in knowing the percentage of profitability on the basis of net sales. Profit margin is calculated on the basis of net income and net sales.
Requirement 1:
Profit margin and return on average total assets.
Concept Introduction:
Return on total assets:
Return on total assets is known as profitability measuerment which is calculated on the basis of net income and average total assets. This ratio helps in knowing the rate of return on average total assets.
Profit margin:
Profit margin refers to a profitability meausrement which helps in knowing the percentage of profitability on the basis of net sales. Profit margin is calculated on the basis of net income and net sales.
Requirement 2:
To explain:
Which company is the preferred investment?
Concept Introduction:
Return on total assets:
Return on total assets is known as profitability measuerment which is calculated on the basis of net income and average total assets. This ratio helps in knowing the rate of return on average total assets.
Profit margin:
Profit margin refers to a profitability meausrement which helps in knowing the percentage of profitability on the basis of net sales. Profit margin is calculated on the basis of net income and net sales.
Requirement 2:
To explain:
Which company is the preferred investment?
Want to see the full answer?
Check out a sample textbook solution
Chapter 17 Solutions
FUND.ACCT.PRIN.
- Maxwell Industries uses flexible budgets. At a normal capacity of 25,000 units, the budgeted manufacturing overhead is $75,000 variable and $300,000 fixed. If Maxwell Industries had actual overhead costs of $385,500 for 27,000 units produced, what is the difference between actual and budgeted costs?arrow_forwardTimberline Corporation, which manufactures wooden furniture, is developing direct labor standards. The basic direct labor rate is $23 per hour. Payroll taxes are 18% of the basic direct labor rate, while fringe benefits such as vacation and health care insurance are $9 per hour. What is the standard rate per direct labor hour?arrow_forwardThe Yen Company has fixed costs of $750,000 and variable costs are 70% of the selling price. To realize profits of $330,000 from sales of 620,000 units, the selling price per unit: ?arrow_forward
- Rehan Manufacturing's break-even point in units is 1,800. The sales price per unit is $20, and the variable cost per unit is $14. If the company sells 4,200 units, what will net income be?helparrow_forwardWhat is the desired profit for the year?arrow_forwardDetermine the pension asset/ liability at December?arrow_forward
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education