(SOLVED) following figures have been extracted from the financial statements of a company. Non-current assets £80 million Current assets £40 million

Discipline: Finance

Type of Paper: Question-Answer

Academic Level: Undergrad. (yrs 1-2)

Paper Format: APA

Pages: 1 Words: 262

Question

The following figures have been extracted from the financial statements of a company.

Non-current assets £80 million
Current assets £40 million

Current liabilities £20 million
Sales  £200 million
Cost of goods sold £75 million
Operating expenses £45 million

Calculate the following financial ratios:

a. Total net asset turnover ratio

b. EBIT percentage

c. ROTNA


Expert Solution Preview

a. Total net asset turn over ratio:


Total net asset turnover ratio is calculated to determine the efficiency of the company's sales with respect to its assets in a year.


Total net asset turnover ratio = Net sales / Total assets


Total assets = Current assets + Non current assets


- 40+80


= 120


Total net asset turnover ratio = 200/120


= 1.66


Answer:


Total net asset turnover ratio is 1.66


b. EBIT Percentage:.......