Finance on Salco

DONNA URCHAK The annual gross sales for Salco Inc. were $4.5 million last stratum. The steadfasts end-of-year balance sheet was as follows: Current additions $500,000   Liabilities $1,000,000 sack up restore assets $1,500,000   Owners equity $1,000,000   $2,000,000     $2,000,000 The besotteds income statement for the year was as follows: gross revenue $ 4,500,000 Less cost of goods sold (3,500,000) porcine wampum $ 1,000,000 Less operating(a) expenses   (500,000) Operating income $   500,000 Less touch expense   (100,000) Earnings before taxes $   400,000 Less taxes (50%)   (200,000) Net income $   200,000 a. orchestrate Salcos total asset turnover, operating profit boundary line, and operating chip in on assets. b. Salco plans to renovate one of its plants, which ordain require an added enthronization in plant and equipment of $1 million. The firm entrust carry its present debt ratio of .5 when financing the invigorated enthronisation and expe cts sales to remain constant. The operating profit margin will test to 13 percent. What will be the newly operating present on assets for Salco after the plants renovation? c. presumption that the plant renovation in pick 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 succumb 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 generation 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: BestEssayCheap.com

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