Finance on Salco

DONNA URCHAK The annual gross sales for Salco Inc. were $4.5 million last class. The stiffs end-of-year balance sheet was as follows: Current additions $500,000   Liabilities $1,000,000 benefit restore assets $1,500,000   Owners equity $1,000,000   $2,000,000     $2,000,000 The wets income statement for the year was as follows: gross revenue $ 4,500,000 Less cost of goods sold (3,500,000) vernacular wampum $ 1,000,000 Less in operation(p) expenses   (500,000) Operating income $   500,000 Less fire expense   (100,000) Earnings before taxes $   400,000 Less taxes (50%)   (200,000) Net income $   200,000 a. manoeuver Salcos total asset turnover, operating profit border, and operating chip in on assets. b. Salco plans to renovate one of its plants, which testament require an added enthronization in plant and equipment of $1 million. The firm pass on carry its present debt ratio of .5 when financing the stark naked enthronization and expects sales t o remain constant. The operating profit margin will test to 13 percent. What will be the new-sprung(prenominal) operating present on assets for Salco after the plants renovation? c. presumption that the plant renovation in billet b occurs and Salcos interest expense rises by $50,000 per year, what will be the upshot earned on the common stockholders investment? Compare this tramp of feed with that earned before the renovation. A. Salcos total asset turnover, operating profit margin, and operating return on assets.

full Asset Turnover = _____Sales_____ Total Assets ! = $4,500,000 $2,000,000 = 2.25 quantify Operating Profit allowance account = Operating Income Sales = $500,000 $4,500,000...If you want to get a full essay, ordering it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: write my essay