The president of Nochance Enterprises and her department
managers are reviewing the operating results of the year just
completed. Sales increased by 12% from the previous year to
$730,000. Average total assets for the year were $400,000. Net
income, after adding back interest expense, net of tax, was
$60,000.

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Question: The president of Nochance Enterprises and her department managers are reviewing the operating res…
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The president is happy with the performance over the past year
but is never satisfied with the status quo. She has set two
specific goals for next year: (1) a 15% growth in sales and (2) a
return on assets of 21%.

To achieve these goals, the president has stated her intention
to increase the total asset base by 10% over the base for the year
just completed.

Required:

1. For the year just completed, compute the
following ratios. Round your answers to two decimal places.

a. Return on sales 8.22 %
b. Asset turnover 1.83 times
c. Return on assets

_____ %

What is return on assets? (I tried 0.15% and it is not that)

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