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Condensed financial data are presented below for the Phoenix Corporation: 2019 2018 Accounts receivable 267,500 $ 230,000 Inventory 312,500 257,500 Total current assets 670,000 565,000
Condensed financial data are presented below for the Phoenix Corporation:
2019 | 2018 | ||||||
Accounts receivable | 267,500 | $ | 230,000 | ||||
Inventory | 312,500 | 257,500 | |||||
Total current assets | 670,000 | 565,000 | |||||
Intangible assets | 50,000 | 60,000 | |||||
Total assets | 825,000 | 695,000 | |||||
Current liabilities | 252,500 | 200,000 | |||||
Long-term liabilities | 77,500 | 75,000 | |||||
Sales | 1,640,000 | ||||||
Cost of goods sold | 982,500 | ||||||
Interest expense | 10,000 | ||||||
Income tax expense | 77,500 | ||||||
Net income | 127,500 | ||||||
Cash flow from operations | 71,000 | ||||||
Cash flow from investing activities | (6,000 | ) | |||||
Cash flow from financing activities | (62,500 | ) | |||||
Tax rate | 30 | % |
The profit margin used to calculate return on assets for 2019 is:
a) 7.9%
b) 8.5%
c) 8.2%
d)16.3 %
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