Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer the rest of b and C; answers are incorrect. Please zoom in for more details or open image in a new tab. If

Please answer the rest of b and C; answers are incorrect.

Please zoom in for more details or open image in a new tab. If the full question is not answered it will be downvoted.

image text in transcribedimage text in transcribed

Dulaney's Stores has posted the following yearly earnings and expenses. Click the icon to view the yearly data. a. Dulaney's current profit margin is 8.3 %. (Enter your response rounded to one decimal place.) Dulaney's current yearly ROA is 138.33 %. (Enter your response rounded to one decimal place.) b. Suppose COGS and merchandise inventory were each cut by 15%. The new pretax profit margin is 21.1 %. (Enter your response rounded to one decimal place.) The new ROA is 300.8 %. (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 15% decrease in merchandise costs. (Enter your response rounded to the nearest dollar.) Earnings and Expenses (Year Ending January 2012) Sales $100,000,000 Cost of goods sold (COGS) $85,000,000 Pretax earnings $8,300,000 Selected Balance Sheet Items Merchandise Inventory $4,150,000 Total assets $6,000,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Hong Kong Auditing Economic Theory And Practice

Authors: Simon Fung, Ferdinard A. Gul

3rd Edition

9629372347, 978-9629372347

More Books

Students also viewed these Accounting questions

Question

What risks are involved in an LBO? AppendixLO1

Answered: 1 week ago