Question

Melanie's Bead Shoppe has total assets of $45,000, accounts receivable of $2,000, accounts payable of $3,100, and inventory valued at $20,000. Last year, her net sales were $29,000, and her operating profit margin equaled $14,000. What is her return on assets

Answer 1

31.11%

Step-by-step explanation:

Given that,

Total assets = $45,000

Accounts receivable = $2,000

Accounts payable of $3,100

Inventory valued at $20,000

Net sales = $29,000

Operating profit margin = $14,000

Return on assets:

= (Operating profit margin ÷ Total assets) × 100

= ($14,000 ÷ $45,000) × 100

= 0.3111 or 31.11%

Therefore, the Melanie's Bead Shoppe return on assets is 31.11%.