James builds brick walls for custom homes. His annual sales are approximately$300,000, and his net income is $18,000. He has assets of $100,000invested in this business. Tom sells window shades. His annual sales areapproximately $900,000, and his net income is $27,000. He has assets of$150,000 invested in his business.a. Compute the net profit margin for both James and Tom.b. Compute the asset turnover for both James and Tom.c. Compare the profitability of these two firms, and discuss the similarities anddifferences.
James builds brick walls for custom homes. His annual sales are approximately$300,000, and his net income is $18,000. He has assets of $100,000invested in this business. Tom sells window shades. His annual sales areapproximately $900,000, and his net income is $27,000. He has assets of$150,000 invested in his business.a. Compute the net profit margin for both James and Tom.b. Compute the asset turnover for both James and Tom.c. Compare the profitability of these two firms, and discuss the similarities anddifferences.
Chapter13: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 6DQ
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Question
James builds brick walls for custom homes. His annual sales are approximately
$300,000, and his net income is $18,000. He has assets of $100,000
invested in this business. Tom sells window shades. His annual sales are
approximately $900,000, and his net income is $27,000. He has assets of
$150,000 invested in his business.
a. Compute the net profit margin for both James and Tom.
b. Compute the asset turnover for both James and Tom.
c. Compare the profitability of these two firms, and discuss the similarities and
differences.
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT