Inventory turnover (based on cost of sales)
Gross profit margin
Shyr’s net sales from the year were
182. Salami Company has a total assets turnover of 0.30 and a profit margin of 10 percent. The
president is unhappy with the current return on assets, and he thinks it could be doubled. This
could be accomplished (1) by increasing the profit margin to 15 percent, and (2) by increasing
the total assets turnover. What new asset turnover ratio, along with the 15 percent profit
margin, is required to double the return on assets?
42. Delo Co. has a debt ratio of 0.50, a total assets turnover of 0.25, and a profit margin of 10%.
The president is unhappy with the current return on equity, and he thinks it could be doubled.
This could be accomplished (1) by increasing the profit margin to 14% and (2) increasing debt
Total assets turnover will not change.
What new debt ratio, along with the 14%
profit margin, is required to double the return on equity?
Working Capital Finance
Working Capital Financing Policy
Conservative Financing Policy
183. As a company becomes more conservative with respect to working capital policy, it would tend
to have a(n).
Selected data from Shyr Company’s year
-end financial statements are presented below. The
difference between average and ending inventory is immaterial.
Aggressive Financing Policy
184. Jekel Company follows and aggressive financing policy in its working capital management
while Michael Corporation follows a conservative financing policy. Which one of the following
statements is correct?
Jekel has low ratio of short-term debt to total debt while Michael has a high ratioof short-
term debt to total debt