Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
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Chapter 13, Problem 13.3P
1.
To determine
Introduction:The accounting ratios of a company are calculated with the help of financial data presented in the financial statements of the company. Accounting ratios help in measuring the profitability and efficiency of the company.
To calculate: Return on sales, asset turnover and return on assets ratios for the year just completed.
2.
To determine
Introduction:The calculation of the asset turnover ratio is made to measure the efficiency of the company to use its assets in generating sales. The sales of the company are used to divide the average total assets to calculate the asset turnover ratio.
To calculate: The asset turnover ratio for next year to achieve a goal of a 20% increase in sales.
3.
To determine
Introduction:The calculation of return on assets is made to measure the efficiency of the company to earn net income by using the average total assets. The net income of the company is used to divide the average total assets to calculate the return on asset ratio.
To calculate: The amount of net income needed in next year to achieve a 15% return on total assets.
4.
To determine
Introduction:The accounting ratios of a company are calculated with the help of financial data presented in the financial statements of the company. Accounting ratios help in measuring the profitability and efficiency of the company.
The reasonableness of the company’s goals. Also, determine the points on which the company should focus to achieve its goals.
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Chapter 13 Solutions
Financial Accounting: The Impact on Decision Makers
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