1915 Words8 Pages
Chapter 3 Problems 1. Dental Delights has two divisions. Division A has a profit of $200,000 on sales of $4,000,000. Division B is only able to make $30,000 on sales of $480,000. Based on the profit margins (returns on sales), which division is superior? 3-1. Solution: Dental Delights Division A Division B [pic] Division B is superior 3. Bass Chemical, Inc., is considering expanding into a new product line. Assets to support this expansion will cost $1,200,000. Bass estimates that it can generate $2 million in annual sales, with a 5 percent profit margin. What would net income and return on assets (investment) be for the year? 3-3. Solution:Bass Chemical, Inc.…show more content…
Praise may be more appropriate than criticism. 3-25. (Continued) b. Debt/total assets |Year |Calloway Ratio |Industry Ratio | |2006 |53.33% |52.0% | |2007 |51.47% |40.0% | |2008 |50.0% |31.0% | While the company’s debt ratio is improving, it is not improving nearly as rapidly as the industry

More about Problems

Get Access