BULM 701 Quizzes 1-3 Exam Questions
with Verified Answers
Return on assets can be desegregated into profit margin x gross margin
True
False - Answer-False
Net Profit Margin x Asset Turnover
ROA is computed as... - Answer-Net Income/Avg Total Assets
Or
Net Profit Margin x Asset Turnover
Kriger's 2012 balance sheet shows average shareholders' equity of $4,632 million, net
income of $602 million, and common shares issued of $959 million. Kroger's ROE for
the year is: - Answer-ROE = NI/Equity = 602/4,632 = .1299 = 12.99%
Proctor & Gamble
Income Statement
Net sales $ 83,680.00
Costs of Good sold $ 42,391.00
Selling General and Administrative expense $ 27,997.00
Operating income $ 13,292.00
Interest expense $ 769.00
Other non operating income $ 262.00
Earnings before interests and taxes $ 12,785.00
Income taxes $ 3,468.00
Net earnings from continuing operations $ 9,317.00
Net earnings from discontinued operations $ 1,587.00
Net earnings $ 10,904.00
What is P&G Gross Profit Margin? - Answer-Gross Margin = Gross Profit/Sales
Revenue
= 41,289/83,680 = .4934 = 49.34%
Proctor & Gamble
Income Statement
Net sales $ 83,680.00
Costs of Good sold $ 42,391.00
Selling General and Administrative expense $ 27,997.00
Operating income $ 13,292.00
Interest expense $ 769.00
Other non operating income $ 262.00
Earnings before interests and taxes $ 12,785.00
Income taxes $ 3,468.00
, Net earnings from continuing operations $ 9,317.00
Net earnings from discontinued operations $ 1,587.00
Net earnings $ 10,904.00
What is P&G operating margin? - Answer-Operating Margin = Operating Profit/Sales
Revenue
= 13,292/83,680
Proctor & Gamble
Income Statement
Net sales $ 83,680.00
Costs of Good sold $ 42,391.00
Selling General and Administrative expense $ 27,997.00
Operating income $ 13,292.00
Interest expense $ 769.00
Other non operating income $ 262.00
Earnings before interests and taxes $ 12,785.00
Income taxes $ 3,468.00
Net earnings from continuing operations $ 9,317.00
Net earnings from discontinued operations $ 1,587.00
Net earnings $ 10,904.00
What is P&G profit margin? - Answer-Profit Margin = Net Income/Sales Revenue
=10,904/83,680 = .13 = 13%
Firm A has a Return on Equity (ROE) equal to 24%, while firm B has an ROE of 15%
during the same year. Both firms have an equity multiplier of to 0.8. Firm A has an asset
turnover ratio of 0.9, while firm B has an asset turnover ratio equal to 0.4. From this we
know that
b. Firm B has a higher profit margin than firm A
c. Firm A and B have the same profit margin
d. Firm A has a higher equity multiplier than firm B
a. Firm A has a higher profit margin than firm B - Answer-Firm B has a higher Profit
Margin than Firm A
(To find, plug in values into Dupont Model and solve for Profit Margin (algebraically)
DuPont analysis breaks ROE into three components, which are, the profit margin, the
current ratio and the equity multiplier.
True
False - Answer-False
Profit Margin x Asset Turnover x Financial Leverage/Equity Multiplier
Express R'US has observed the following financial performance:
1. Gross profit margin is unchanged, but
