Question
A farm business manager has just finished preparing end of year financial statements for the business. The following financial information was determined: Current assets beginning
A farm business manager has just finished preparing end of year financial statements for the business. The following financial information was determined:
Current assets beginning of year $200,000
Total assets beginning of year $600,000
Current liabilities beginning of year $100,000
Total liabilities beginning of year $150,000
Total equity beginning of year $450.000
Current assets end of year $250,000
Total assets end of year $800,000
Current liabilities end of year $150,000
Total liabilities end of year $300,000
Total equity end of year $500,000
Gross revenue $600,000
Net farm income from operations $115,000
Operating expense $425,000
Farm interest expense $20,000
Depreciation expense $45,000
Owner withdrawals (for unpaid labor and Mgt.) $50,000
Non-farm income $35,000
What is the farm business' operating profit margin ratio?
| a. | .1063 | |
| b. | .1083 | |
| c. | .1917 | |
| d. | .1417 |
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