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Introduction: -
Comparative analysis: Comparative analysis is one which determines an organization’s financial performance with a rival firm or else between different/ separate periods of time.
Profit margin ratio: Profit margin ratio is the net income earned by the sales made for a given period of time in a business. This ratio shows how much net income is shown on the sales. The ability to convert the sales into net income is calculated with the help of this ratio.
Formula of profit margin ratio:
Investment turnover ratio: Investment turnover ratio is defined as an ability of making the sales revenue with the money invested in an organization.
Formula of investment turnover ratio:
Average invested assets:
To calculate:-
a) Profit margin for each company
b) Investment turnover for each company
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Chapter 24 Solutions
Loose Leaf for Fundamental Accounting Principles
- The following information is taken from the financial statements of a company for the current year: Current assets $ 3,95,000 Total assets $ 8,90,000 Cost of goods sold $ 6,50,000 Gross profit $ 2,00,000 $ 1,20,000 Net income The gross profit percentage for the current year: A. 24% B. 31% C. 76% D. 60%.arrow_forwardZeel Corporation has an inventory period of 48 days, an accounts receivable period of 8 days, and an accounts payable period of 5 days. The company's annual sales are $195,620. How many times per year does the company turn over its accounts receivable?arrow_forwardWhat is Anna's asset turnover forarrow_forward
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- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
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