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What is relationship of asset turnover rate to the rate of return on total assets?
Wiki User
∙ 11y ago
It is the ratio..
Wiki User
∙ 11y ago
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What is the profit margin if the asset turnover ratio is 3 time and the return on asset is .1?
Return on Assets = Profit Margin on Sales x Asset Turnover .1 = Profit Margin on Sales x 3 .033 = Profit Margin on Sales
A firm can increase its operating return on assets how?
A firm can increase its Operating Return on Assets (OROA) through: (1) Operation Management: Increasing operating profit margin by efficiently managing costs like marketing expenses, general selling and administrative expenses (2) Asset Management: Increasing total asset turnover by selling inventories and collecting accounts receivables as quickly as possible
What is sales turnover from annual turnover?
Sales turnover is purely the revenue from selling a good or service. It excludes things like return on investment, interest earned and asset appreciation which are also included in the annual turnover.
The risk-return relationship for each financial asset is shown on?
the security market line
What is total return?
It is the rate of return on an asset or a portfolio of assets over a specific period of time. The computation of Total Return includes not only asset price appreciations (or depreciations), but also cash inflows such as: dividends, capital gains, interests and principal returns.
Which two ratio are used in DuPont system to create return on assets?
Return on Assets = Profit Margin X Asset Turnover
What is Return on Assets DuPont?
Return on Assets DuPont is a ratio that shows how the return on assets depends on both asset turnover and profit margin. The DuPont Method or Formula breaks out these two components (asset turnover & profit margin) in order to determine the impact of each on the profitability of the company. This ratio helps to highlight the impact of changes in asset turnover and profit margin.Formula:ROA DuPont = (Net Income/Sales) * (Sales/Total Assets)
What is the asset turnover ratio if the profit margin is 5 percent and the return on assets is 13.5 percent?
ROA = Net Profit Margin * Asset Turnover Asset Turnover = ROA/Profit Margin = 13.5/5 = 2.7%
In the DuPont formula return on assets equals?
Return on Assets DuPont is a ratio that shows how the return on assets depends on both asset turnover and profit margin. The DuPont Method or Formula breaks out these two components (asset turnover & profit margin) in order to determine the impact of each on the profitability of the company. This ratio helps to highlight the impact of changes in asset turnover and profit margin.Formula:ROA DuPont = (Net Income/Sales) * (Sales/Total Assets)
What is the profit margin if the asset turnover ratio is 3 time and the return on asset is .1?
Return on Assets = Profit Margin on Sales x Asset Turnover .1 = Profit Margin on Sales x 3 .033 = Profit Margin on Sales
Explain how return on assets decline given an increase in net profit margin?
If you look at what Return on Assets is comprised of, Net Profit Margin and the Total Asset Turnover, if the firm is having a very slow turnover, the ROA will be declining if the turnover is greater in magnitude to the NPM.
How do you calculate total asset turnover?
Total asset turnover ratio = total sales / total assets
What is operating assets turnover?
Operating asset turnover is the ratio of net sales divided by operating assets.
What is asset turnover?
Asset Turnover is a financial ratio that measures the efficiency of a company's use of its assets in generating revenue or income for the company. A higher asset turnover ratio implies that the company is operating efficiently and is able to generate solid revenue income using the assets at their disposal.Formula:Asset Turnover = Sales / Average Total Assets
If theasset turnover of a company is 3.2 the total assets are 32000 what were the net sales?
Formula for asset turnover: Asset turnover = net sales / total assets Net sales = 32000 * 3.2 = 102400
What is the asset turnover ratio used for?
The asset turnover ratio is used to calculate how effectively a company is using it's assets to encourage production. If the asset turnover ratio is high, the assets are being used effectively. If the ratio is low, the assets could be used more productively to facilitate production.
What is net profits divided by total assets?
net profit devided by total assets is called return on total asset and formula is as follows: Return on total assets = Net profit / total assets.
