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Chapter 2 [Basic Financial Ratios] A venture recorded revenues of $1 million last year and net profit of $100,000. Total assets were $800,000 at the
Chapter 2
- [Basic Financial Ratios] A venture recorded revenues of $1 million last year and net profit of $100,000. Total assets were $800,000 at the end of last year.
- Calculate the ventures net profit margin.
- Calculate the ventures asset turnover.
- Calculate the ventures return on total assets.
- [Financial Ratios and Performance] Following is financial information for three ventures:
Venture XX Venture YY Venture ZZ
After-tax Profit Margins 5% 15% 25%
Asset Turnover 2.0 times 1.0 times 3.0 times
- Calculate the return on assets (ROA) for each firm.
- Which venture is indicative of a strong entrepreneurial venture opportunity?
- Which venture seems to be more of a commodity type business?
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