1. What does gross margin tell a business owner? Discussion Questions 2. What does operating margin tell a business owner? 3. What does net margin tell a business owner? 4. Under normal business conditions, 5. How do margins allow comparison to the industry? margin, which is greater than margin is always greater than 6. How can margins be used for business trend analysis? 7. What does return on assets tell a business owner? B. What does return on equity tell a business owner? 9. How might a business owner use return on equity in making future business investment decisions? 10. What is working capital? 11. What is the formula for working capital? 12. What is the role of working capital in supporting business's operation? 13. What are the possible sources of funding for working capital? 14. How can days in inventory be used by a business owner to better understand and manage his or her business? 15. How can decreasing days in inventory help a business? 16. What does the collection period tell a business owner? 17. How can decreasing the collection period help a business? 18. How can understanding the collection period help a business owner to better understand and manage his or her business? 19. What does the payment period tell a business owner and how does increasing the payment period help a business? 20. What does the cash collection cycle tell a business owner? 1. Calculate the indicated profitability ration: Exercises/Problems - If revenue is $155,200 and gross profit is $70,325, calculate gross margin. - If cevenue is $155,200 and operatine profit is $10,290, calculate operating margin. - If revenue is $155.200 and net profit is $7.674, calculate net margin: o If net profit is $7.674, total assets are 572,000 , and total equity is $44,356, calculate return on assets and return on equity