Question
Dulaney's Stores has posted the following yearly earnings and expenses. LOADING... Click the icon to view the yearly data. a. Dulaney's current profit margin is
Dulaney's Stores has posted the following yearly earnings and expenses. LOADING... Click the icon to view the yearly data. a. Dulaney's current profit margin is 10.1%. (Enter your response rounded to one decimal place.) Dulaney's current yearly ROA is 96.0%. (Enter your response rounded to one decimal place.) b. Suppose COGS and merchandise inventory were each cut by 10%. The new pretax profit margin is 19.2%. (Enter your response rounded to one decimal place.) The new ROA is 132.8 191.8%. (Enter your response rounded to one decimal place.) c. Based on the current profit margin in part a., Dulaney would have to generate $?_______________??? in additional sales in order to have the same effect on pretax earnings as a 10% decrease in merchandise costs. (Enter your response rounded to the nearest dollar.)
earnings expenses
sales: 57,000,000
cost of goods sold: 52,000,000
pretax earnings: 5757000
selected balance sheet items
merchandise inventory 2878500
total assets 6000000
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