Concept #1: Ratios: Profit Margin x Asset Turnover = Return On Assets
Practice: XYZ Company had a profit margin of 8.8% and total asset turnover of 0.77. What is XYZ’s Return on Assets?
Practice: A company had a profit margin of 6.1%. The company’s net sales were $3,600,000 and Cost of Goods Sold was $600,000. If total assets were $3,450,000 at the beginning of the year and $4,210,000 at the end of the year, what is the company’s return on assets?