The balance sheet of Paradise Pizza reports total assets of $1,500,000 and $1,700,000 at the beginning and end of the year, respectively. Net income and sales for the year are $240,000 and $2,000,000, respectively.
What is Paradise Pizza's profit margin?
A) 15%.
B) 14.12%.
C) 16%.
D) 12%.
Answer: D
The balance sheet of Paradise Pizza reports total assets of $1,500,000 and $1,700,000 at the beginning and end of the year, respectively. Net income and sales for the year are $240,000 and $2,000,000, respectively.
What is Paradise Pizza's return on assets?
A) 15%.
B) 14.12%.
C) 16%.
D) 12%.
Answer: A
Return on assets is equal to:
A) Profit margin plus asset turnover.
B) Profit margin minus asset turnover.
C) Profit margin times asset turnover.
D) Profit margin divided by asset turnover.
Answer: C
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