Carson Electronics’ management has long viewed BGT Electronics as an industry leader and uses this firm as a model firm for analyzing its own performance. The balance sheet and income statements for the two firms are as follows:Calculate the following ratios for both Carson and BGT:a)Total asset turnover:b) Operating profit margin:c) Operating return on assets: Carson Electronics, Inc.Balance Sheet ($000)BGT Electronics, Inc.Balance Sheet ($000)CashAccounts receivableInventoriesCurrent assetsNet fixed assetsTotal assets$ 2,0004,5001,500$ 8,00016,000$24,000$ 1,5006,0002,500$10,00025,000$35,000Accounts payableAccrued expensesShort-term notes payableCurrent liabilities$ 2,5001,0003,500$ 7,0008,0009,000$24,000$ 5,0001,5001,500$ 8,0004,00023,000$35,000Long-term debtOwners' equityTotal liabilities and owners' equityCarson Electronics, Inc.Income Statement ($000)BGT Electronics, Inc.Income Statement ($000)Net sales (all credit)Cost of goods soldGross profitOperating expensesNet operating incomeInterest expenseEarnings before taxesIncome taxes (40%)$48,000(36,000)$12,000(8,000)$ 4,000(1,150)2,850(1,140)$ 1,710$70,000(42,000)$28,000(12,000)$16,000(550)15,450(6,180)$ 9,270Net income

a) Total Asset Turnover Ratio: i) Carson Inc = ( Net Sales / Total asset ) = 48,000 /24,000 = 2 ii)…

Carson Electronics’ management has long viewed BGT Electronics as an industry leader and uses this firm as a model firm for analyzing its own performance. The balance sheet and income statements for the two firms are as follows: Calculate the following ratios for both Carson and BGT: a)Total asset turnover: b) Operating profit margin: c) Operating return on assets

Carson Electronics’ management has long viewed BGT Electronics as an industry leader and uses this firm as a model firm for analyzing its own performance. The balance sheet and income statements for the two firms are as follows: Calculate the following ratios for both Carson and BGT: a)Total asset turnover: b) Operating profit margin: c) Operating return on assets

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 13MCQ

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