Profit Margin: Profit margin is a profitability ratio which calculates the relation between net income and sales. Investment Turnover: Asset or Investment turnover ratio measures the sales generated by a company relative to the value of its assets. It is used as an indicator of the efficiency with which a company is deploying its assets in generating revenue. To Calculate: Requirement 1: Profit Margin of each division

Question

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Answer 1

Question

Chapter 24, Problem 21E

To determine

Introduction:

Profit Margin: Profit margin is a profitability ratio which calculates the relation between net income and sales.

Investment Turnover: Asset or Investment turnover ratio measures the sales generated by a company relative to the value of its assets. It is used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.

To Calculate:

Requirement 1: Profit Margin of each division

Expert Solution

Answer to Problem 21E

Solution:

Profit Margin of –

Professional Products = 20.32%

Consumer Products = 18.52%

Luxury Products = 17.55%

Active Cosmetics = 20.06%

Explanation of Solution

Professional Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{552}{2717} x 100 \\ = 20.32 % \end{array}$

Consumer Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{1765}{9530} x 100 \\ = 18.52 % \end{array}$

Luxury Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{791}{4507} x 100 \\ = 17.55 % \end{array}$

Active Cosmetics

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{278}{1386} x 100 \\ = 20.06 % \end{array}$

Conclusion

Professional Products has the highest profit margin

To determine

Requirement 2: Investment Turnover of each division

Expert Solution

Explanation of Solution

Investment Turnover of –

Professional Products = 1.12

Consumer Products = 1.66

Luxury Products = 1.17

Active Cosmetics = 1.68

Professional Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{2717}{(2324 + 2516) / 2} \\ = 1.12 \end{array}$

Consumer Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{9530}{(5994 + 5496) / 2} \\ = 1.66 \end{array}$

Luxury Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{4507}{(3651 + 4059) / 2} \\ = 1.17 \end{array}$

Active Cosmetics

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{1386}{(830 + 817) / 2} \\ = 1.68 \end{array}$

Conclusion

Active Cosmetics has the best investment turnover

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If someone tracks, tallys and totals a current liabilities for an accounting period, and then seeks to apply this value in a calculation to assess our liquidity, what’s the difference between the current ratio and the “acid-test” (or “quick”) ratio? Does the difference between these two metrics even matter?

Answer 2

Question

Chapter 24, Problem 21E

To determine

Introduction:

Profit Margin: Profit margin is a profitability ratio which calculates the relation between net income and sales.

Investment Turnover: Asset or Investment turnover ratio measures the sales generated by a company relative to the value of its assets. It is used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.

To Calculate:

Requirement 1: Profit Margin of each division

Expert Solution

Answer to Problem 21E

Solution:

Profit Margin of –

Professional Products = 20.32%

Consumer Products = 18.52%

Luxury Products = 17.55%

Active Cosmetics = 20.06%

Explanation of Solution

Professional Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{552}{2717} x 100 \\ = 20.32 % \end{array}$

Consumer Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{1765}{9530} x 100 \\ = 18.52 % \end{array}$

Luxury Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{791}{4507} x 100 \\ = 17.55 % \end{array}$

Active Cosmetics

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{278}{1386} x 100 \\ = 20.06 % \end{array}$

Conclusion

Professional Products has the highest profit margin

To determine

Requirement 2: Investment Turnover of each division

Expert Solution

Explanation of Solution

Investment Turnover of –

Professional Products = 1.12

Consumer Products = 1.66

Luxury Products = 1.17

Active Cosmetics = 1.68

Professional Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{2717}{(2324 + 2516) / 2} \\ = 1.12 \end{array}$

Consumer Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{9530}{(5994 + 5496) / 2} \\ = 1.66 \end{array}$

Luxury Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{4507}{(3651 + 4059) / 2} \\ = 1.17 \end{array}$

Active Cosmetics

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{1386}{(830 + 817) / 2} \\ = 1.68 \end{array}$

Conclusion

Active Cosmetics has the best investment turnover

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Answer 3

Question

Chapter 24, Problem 21E

To determine

Introduction:

Profit Margin: Profit margin is a profitability ratio which calculates the relation between net income and sales.

Investment Turnover: Asset or Investment turnover ratio measures the sales generated by a company relative to the value of its assets. It is used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.

To Calculate:

Requirement 1: Profit Margin of each division

Expert Solution

Answer to Problem 21E

Solution:

Profit Margin of –

Professional Products = 20.32%

Consumer Products = 18.52%

Luxury Products = 17.55%

Active Cosmetics = 20.06%

Explanation of Solution

Professional Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{552}{2717} x 100 \\ = 20.32 % \end{array}$

Consumer Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{1765}{9530} x 100 \\ = 18.52 % \end{array}$

Luxury Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{791}{4507} x 100 \\ = 17.55 % \end{array}$

Active Cosmetics

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{278}{1386} x 100 \\ = 20.06 % \end{array}$

Conclusion

Professional Products has the highest profit margin

To determine

Requirement 2: Investment Turnover of each division

Expert Solution

Explanation of Solution

Investment Turnover of –

Professional Products = 1.12

Consumer Products = 1.66

Luxury Products = 1.17

Active Cosmetics = 1.68

Professional Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{2717}{(2324 + 2516) / 2} \\ = 1.12 \end{array}$

Consumer Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{9530}{(5994 + 5496) / 2} \\ = 1.66 \end{array}$

Luxury Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{4507}{(3651 + 4059) / 2} \\ = 1.17 \end{array}$

Active Cosmetics

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{1386}{(830 + 817) / 2} \\ = 1.68 \end{array}$

Conclusion

Active Cosmetics has the best investment turnover

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Answer 4

Question

Chapter 24, Problem 21E

To determine

Introduction:

Profit Margin: Profit margin is a profitability ratio which calculates the relation between net income and sales.

Investment Turnover: Asset or Investment turnover ratio measures the sales generated by a company relative to the value of its assets. It is used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.

To Calculate:

Requirement 1: Profit Margin of each division

Expert Solution

Answer to Problem 21E

Solution:

Profit Margin of –

Professional Products = 20.32%

Consumer Products = 18.52%

Luxury Products = 17.55%

Active Cosmetics = 20.06%

Explanation of Solution

Professional Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{552}{2717} x 100 \\ = 20.32 % \end{array}$

Consumer Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{1765}{9530} x 100 \\ = 18.52 % \end{array}$

Luxury Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{791}{4507} x 100 \\ = 17.55 % \end{array}$

Active Cosmetics

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{278}{1386} x 100 \\ = 20.06 % \end{array}$

Conclusion

Professional Products has the highest profit margin

To determine

Requirement 2: Investment Turnover of each division

Expert Solution

Explanation of Solution

Investment Turnover of –

Professional Products = 1.12

Consumer Products = 1.66

Luxury Products = 1.17

Active Cosmetics = 1.68

Professional Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{2717}{(2324 + 2516) / 2} \\ = 1.12 \end{array}$

Consumer Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{9530}{(5994 + 5496) / 2} \\ = 1.66 \end{array}$

Luxury Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{4507}{(3651 + 4059) / 2} \\ = 1.17 \end{array}$

Active Cosmetics

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{1386}{(830 + 817) / 2} \\ = 1.68 \end{array}$

Conclusion

Active Cosmetics has the best investment turnover

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Answer 5

Chapter 24, Problem 21E

To determine

Introduction:

Profit Margin: Profit margin is a profitability ratio which calculates the relation between net income and sales.

Investment Turnover: Asset or Investment turnover ratio measures the sales generated by a company relative to the value of its assets. It is used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.

To Calculate:

Requirement 1: Profit Margin of each division

Expert Solution

Answer to Problem 21E

Solution:

Profit Margin of –

Professional Products = 20.32%

Consumer Products = 18.52%

Luxury Products = 17.55%

Active Cosmetics = 20.06%

Explanation of Solution

Professional Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{552}{2717} x 100 \\ = 20.32 % \end{array}$

Consumer Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{1765}{9530} x 100 \\ = 18.52 % \end{array}$

Luxury Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{791}{4507} x 100 \\ = 17.55 % \end{array}$

Active Cosmetics

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{278}{1386} x 100 \\ = 20.06 % \end{array}$

Conclusion

Professional Products has the highest profit margin

To determine

Requirement 2: Investment Turnover of each division

Expert Solution

Explanation of Solution

Investment Turnover of –

Professional Products = 1.12

Consumer Products = 1.66

Luxury Products = 1.17

Active Cosmetics = 1.68

Professional Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{2717}{(2324 + 2516) / 2} \\ = 1.12 \end{array}$

Consumer Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{9530}{(5994 + 5496) / 2} \\ = 1.66 \end{array}$

Luxury Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{4507}{(3651 + 4059) / 2} \\ = 1.17 \end{array}$

Active Cosmetics

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{1386}{(830 + 817) / 2} \\ = 1.68 \end{array}$

Conclusion

Active Cosmetics has the best investment turnover

Answer 6

Chapter 24, Problem 21E

To determine

Introduction:

Profit Margin: Profit margin is a profitability ratio which calculates the relation between net income and sales.

Investment Turnover: Asset or Investment turnover ratio measures the sales generated by a company relative to the value of its assets. It is used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.

To Calculate:

Requirement 1: Profit Margin of each division

Expert Solution

Answer to Problem 21E

Solution:

Profit Margin of –

Professional Products = 20.32%

Consumer Products = 18.52%

Luxury Products = 17.55%

Active Cosmetics = 20.06%

Explanation of Solution

Professional Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{552}{2717} x 100 \\ = 20.32 % \end{array}$

Consumer Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{1765}{9530} x 100 \\ = 18.52 % \end{array}$

Luxury Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{791}{4507} x 100 \\ = 17.55 % \end{array}$

Active Cosmetics

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{278}{1386} x 100 \\ = 20.06 % \end{array}$

Conclusion

Professional Products has the highest profit margin

Answer 7

Chapter 24, Problem 21E

To determine

Introduction:

Profit Margin: Profit margin is a profitability ratio which calculates the relation between net income and sales.

Investment Turnover: Asset or Investment turnover ratio measures the sales generated by a company relative to the value of its assets. It is used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.

To Calculate:

Requirement 1: Profit Margin of each division

Answer 8

Expert Solution

Answer to Problem 21E

Solution:

Profit Margin of –

Professional Products = 20.32%

Consumer Products = 18.52%

Luxury Products = 17.55%

Active Cosmetics = 20.06%

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Professional Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{552}{2717} x 100 \\ = 20.32 % \end{array}$

Consumer Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{1765}{9530} x 100 \\ = 18.52 % \end{array}$

Luxury Products

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{791}{4507} x 100 \\ = 17.55 % \end{array}$

Active Cosmetics

$\begin{array}{l} P r o f i t M a r g i n = \frac{N e t I n c o m e}{S a l e s} x 100 \\ = \frac{278}{1386} x 100 \\ = 20.06 % \end{array}$

Answer 13

Conclusion

Professional Products has the highest profit margin

Answer 14

To determine

Requirement 2: Investment Turnover of each division

Expert Solution

Explanation of Solution

Investment Turnover of –

Professional Products = 1.12

Consumer Products = 1.66

Luxury Products = 1.17

Active Cosmetics = 1.68

Professional Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{2717}{(2324 + 2516) / 2} \\ = 1.12 \end{array}$

Consumer Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{9530}{(5994 + 5496) / 2} \\ = 1.66 \end{array}$

Luxury Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{4507}{(3651 + 4059) / 2} \\ = 1.17 \end{array}$

Active Cosmetics

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{1386}{(830 + 817) / 2} \\ = 1.68 \end{array}$

Conclusion

Active Cosmetics has the best investment turnover

Answer 15

To determine

Requirement 2: Investment Turnover of each division

Answer 16

Expert Solution

Explanation of Solution

Investment Turnover of –

Professional Products = 1.12

Consumer Products = 1.66

Luxury Products = 1.17

Active Cosmetics = 1.68

Professional Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{2717}{(2324 + 2516) / 2} \\ = 1.12 \end{array}$

Consumer Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{9530}{(5994 + 5496) / 2} \\ = 1.66 \end{array}$

Luxury Products

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{4507}{(3651 + 4059) / 2} \\ = 1.17 \end{array}$

Active Cosmetics

$\begin{array}{l} I n v e s t m e n t T u r n o v e r = \frac{N e t S a l e s}{A v e r a g e A s s e t s} \\ = \frac{1386}{(830 + 817) / 2} \\ = 1.68 \end{array}$