{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

BUS 401.Finance &acirc;€“ Assignments

# BUS 401.Finance &acirc;€“ Assignments - BUS...

This preview shows pages 1–2. Sign up to view the full content.

BUS 401.Finance – Assignments Week 1 Ratio Analysis Complete Study Problem 4.10 on page 124 of the text and submit to instructor. In parts "a" and "b," clearly label the calculation of the required ratios and solve using Excel. Use formulas to calculate the ratios and format the cells to insert a comma if there is more than three numbers. Round to the nearest whole number. In part "c," clearly label the pre and post renovation analysis using an Excel work sheet. Do a comparative analysis in a Word document not to exceed 200 words explaining whether the renovation should occur. A) Total Asset Turnover: 4,500,000 / 2,000,000 = 2.25 Operating Profit Margin: 500,000 / 4,500,000 = .11 (11%) Operating Return on Assets: (500,000/4,500,000)*(4,500,000/2,000,000) =.11 * 2.25 = .2475 (24.75%) = 25% B) .13 * (4,500,000/3,000,000) = .13 * 1.5 = .195 = 19.5% C) The way I understood the text, the operating profit margin is used to calculate the operating return on assets BEFORE interest expenses or taxes are taken out of the operating income. If this is the case, then the additional \$50,000 rise in interest expense wouldn’t have an effect on the operating profit margin.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 3

BUS 401.Finance &acirc;€“ Assignments - BUS...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online