SlideShare a Scribd company logo
1 of 2
X Enterprises has the following comparative balance sheets and income statements
1.) What is the Earnings Before Interest?
2.) What is the Profit Margin ratio used in ROA?
3) What is the Return on Assets?
Statement
of Financial
Position
Income Statement
for the year ending
December 31, 12
Dec 31, 12 Dec 31, 11 Revenues $100.0
Total Assets $120 $100 Operating expenses 80.0
Total Liabilities 70 60 Interest Expense 6.0
Shareholders' equity 50 40 Income before Taxes 14.0
Tax Expense (30%) 4.2
Net Income 9.8
Solution
Earning before interest = Revenue - Operating Expenses. (100-80=20)
Profit Margin ration = Net Income/Net Sales. (9.8/214=0.45)
Return on Asset = Net Income/Total Asset. (9.8/5.6=1.75)
X Enterprises has the following comparative balance sheets and income.docx

More Related Content

More from noreendchesterton753

Spongy moths- Lymantria dispar- have four life cycle stages- egg- cate.docx
Spongy moths- Lymantria dispar- have four life cycle stages- egg- cate.docxSpongy moths- Lymantria dispar- have four life cycle stages- egg- cate.docx
Spongy moths- Lymantria dispar- have four life cycle stages- egg- cate.docx
noreendchesterton753
 

More from noreendchesterton753 (20)

Sunspot Beverages- Limited- of Fiji uses the weighted-average method i.docx
Sunspot Beverages- Limited- of Fiji uses the weighted-average method i.docxSunspot Beverages- Limited- of Fiji uses the weighted-average method i.docx
Sunspot Beverages- Limited- of Fiji uses the weighted-average method i.docx
 
Sunland Company has the following data-Compute total manufacturing cos.docx
Sunland Company has the following data-Compute total manufacturing cos.docxSunland Company has the following data-Compute total manufacturing cos.docx
Sunland Company has the following data-Compute total manufacturing cos.docx
 
Successful negotiating includes some kind of manipulation in order to.docx
Successful negotiating includes some kind of manipulation in order to.docxSuccessful negotiating includes some kind of manipulation in order to.docx
Successful negotiating includes some kind of manipulation in order to.docx
 
Subsidiary holds an allocated net operating loss (NOL) when it leaves.docx
Subsidiary holds an allocated net operating loss (NOL) when it leaves.docxSubsidiary holds an allocated net operating loss (NOL) when it leaves.docx
Subsidiary holds an allocated net operating loss (NOL) when it leaves.docx
 
Substances that dissolve readily in water are termed hydrophilic- They.docx
Substances that dissolve readily in water are termed hydrophilic- They.docxSubstances that dissolve readily in water are termed hydrophilic- They.docx
Substances that dissolve readily in water are termed hydrophilic- They.docx
 
subject FASHION The combination of which Roman terms most closely co.docx
subject FASHION   The combination of which Roman terms most closely co.docxsubject FASHION   The combination of which Roman terms most closely co.docx
subject FASHION The combination of which Roman terms most closely co.docx
 
Styling Conventions By only changing the case of some of the letters-.docx
Styling Conventions By only changing the case of some of the letters-.docxStyling Conventions By only changing the case of some of the letters-.docx
Styling Conventions By only changing the case of some of the letters-.docx
 
Students spend an average of $520 each semester on textbooks- Suppose.docx
Students spend an average of $520 each semester on textbooks- Suppose.docxStudents spend an average of $520 each semester on textbooks- Suppose.docx
Students spend an average of $520 each semester on textbooks- Suppose.docx
 
Species interactions determine an organism's fundamental niche- True F.docx
Species interactions determine an organism's fundamental niche- True F.docxSpecies interactions determine an organism's fundamental niche- True F.docx
Species interactions determine an organism's fundamental niche- True F.docx
 
Spongy moths- Lymantria dispar- have four life cycle stages- egg- cate.docx
Spongy moths- Lymantria dispar- have four life cycle stages- egg- cate.docxSpongy moths- Lymantria dispar- have four life cycle stages- egg- cate.docx
Spongy moths- Lymantria dispar- have four life cycle stages- egg- cate.docx
 
SPSS output of a binomial probability distribution with succes probabi.docx
SPSS output of a binomial probability distribution with succes probabi.docxSPSS output of a binomial probability distribution with succes probabi.docx
SPSS output of a binomial probability distribution with succes probabi.docx
 
Starting on the day Holly was born- her mother has invested $30 at the.docx
Starting on the day Holly was born- her mother has invested $30 at the.docxStarting on the day Holly was born- her mother has invested $30 at the.docx
Starting on the day Holly was born- her mother has invested $30 at the.docx
 
Steve Ballmer organized government spending data on the basis of four.docx
Steve Ballmer organized government spending data on the basis of four.docxSteve Ballmer organized government spending data on the basis of four.docx
Steve Ballmer organized government spending data on the basis of four.docx
 
Since most of a tree trunk is xylem- most of a tree trunk is not alive.docx
Since most of a tree trunk is xylem- most of a tree trunk is not alive.docxSince most of a tree trunk is xylem- most of a tree trunk is not alive.docx
Since most of a tree trunk is xylem- most of a tree trunk is not alive.docx
 
Stabilizing selection acting on a trait in a population always results.docx
Stabilizing selection acting on a trait in a population always results.docxStabilizing selection acting on a trait in a population always results.docx
Stabilizing selection acting on a trait in a population always results.docx
 
Smugglers use a variety of -technologies- to evade detection- Describe.docx
Smugglers use a variety of -technologies- to evade detection- Describe.docxSmugglers use a variety of -technologies- to evade detection- Describe.docx
Smugglers use a variety of -technologies- to evade detection- Describe.docx
 
Stakeholders are groups that are influenced by and can influence the d.docx
Stakeholders are groups that are influenced by and can influence the d.docxStakeholders are groups that are influenced by and can influence the d.docx
Stakeholders are groups that are influenced by and can influence the d.docx
 
Some species of bacteria including Bacillus subtilis and Clostridium t.docx
Some species of bacteria including Bacillus subtilis and Clostridium t.docxSome species of bacteria including Bacillus subtilis and Clostridium t.docx
Some species of bacteria including Bacillus subtilis and Clostridium t.docx
 
Soil can be classified by its particle size (diameter)- a- Which type.docx
Soil can be classified by its particle size (diameter)- a- Which type.docxSoil can be classified by its particle size (diameter)- a- Which type.docx
Soil can be classified by its particle size (diameter)- a- Which type.docx
 
Simplify as a single actuarial symbol- Thank you- Simplisy 0tPxAx+tdt.docx
Simplify as a single actuarial symbol- Thank you- Simplisy 0tPxAx+tdt.docxSimplify as a single actuarial symbol- Thank you- Simplisy 0tPxAx+tdt.docx
Simplify as a single actuarial symbol- Thank you- Simplisy 0tPxAx+tdt.docx
 

Recently uploaded

Beyond the EU: DORA and NIS 2 Directive's Global Impact
Beyond the EU: DORA and NIS 2 Directive's Global ImpactBeyond the EU: DORA and NIS 2 Directive's Global Impact
Beyond the EU: DORA and NIS 2 Directive's Global Impact
PECB
 
Seal of Good Local Governance (SGLG) 2024Final.pptx
Seal of Good Local Governance (SGLG) 2024Final.pptxSeal of Good Local Governance (SGLG) 2024Final.pptx
Seal of Good Local Governance (SGLG) 2024Final.pptx
negromaestrong
 
The basics of sentences session 2pptx copy.pptx
The basics of sentences session 2pptx copy.pptxThe basics of sentences session 2pptx copy.pptx
The basics of sentences session 2pptx copy.pptx
heathfieldcps1
 
Making and Justifying Mathematical Decisions.pdf
Making and Justifying Mathematical Decisions.pdfMaking and Justifying Mathematical Decisions.pdf
Making and Justifying Mathematical Decisions.pdf
Chris Hunter
 

Recently uploaded (20)

Measures of Dispersion and Variability: Range, QD, AD and SD
Measures of Dispersion and Variability: Range, QD, AD and SDMeasures of Dispersion and Variability: Range, QD, AD and SD
Measures of Dispersion and Variability: Range, QD, AD and SD
 
Beyond the EU: DORA and NIS 2 Directive's Global Impact
Beyond the EU: DORA and NIS 2 Directive's Global ImpactBeyond the EU: DORA and NIS 2 Directive's Global Impact
Beyond the EU: DORA and NIS 2 Directive's Global Impact
 
Unit-V; Pricing (Pharma Marketing Management).pptx
Unit-V; Pricing (Pharma Marketing Management).pptxUnit-V; Pricing (Pharma Marketing Management).pptx
Unit-V; Pricing (Pharma Marketing Management).pptx
 
Explore beautiful and ugly buildings. Mathematics helps us create beautiful d...
Explore beautiful and ugly buildings. Mathematics helps us create beautiful d...Explore beautiful and ugly buildings. Mathematics helps us create beautiful d...
Explore beautiful and ugly buildings. Mathematics helps us create beautiful d...
 
Basic Civil Engineering first year Notes- Chapter 4 Building.pptx
Basic Civil Engineering first year Notes- Chapter 4 Building.pptxBasic Civil Engineering first year Notes- Chapter 4 Building.pptx
Basic Civil Engineering first year Notes- Chapter 4 Building.pptx
 
INDIA QUIZ 2024 RLAC DELHI UNIVERSITY.pptx
INDIA QUIZ 2024 RLAC DELHI UNIVERSITY.pptxINDIA QUIZ 2024 RLAC DELHI UNIVERSITY.pptx
INDIA QUIZ 2024 RLAC DELHI UNIVERSITY.pptx
 
ICT role in 21st century education and it's challenges.
ICT role in 21st century education and it's challenges.ICT role in 21st century education and it's challenges.
ICT role in 21st century education and it's challenges.
 
psychiatric nursing HISTORY COLLECTION .docx
psychiatric  nursing HISTORY  COLLECTION  .docxpsychiatric  nursing HISTORY  COLLECTION  .docx
psychiatric nursing HISTORY COLLECTION .docx
 
General Principles of Intellectual Property: Concepts of Intellectual Proper...
General Principles of Intellectual Property: Concepts of Intellectual  Proper...General Principles of Intellectual Property: Concepts of Intellectual  Proper...
General Principles of Intellectual Property: Concepts of Intellectual Proper...
 
ComPTIA Overview | Comptia Security+ Book SY0-701
ComPTIA Overview | Comptia Security+ Book SY0-701ComPTIA Overview | Comptia Security+ Book SY0-701
ComPTIA Overview | Comptia Security+ Book SY0-701
 
Energy Resources. ( B. Pharmacy, 1st Year, Sem-II) Natural Resources
Energy Resources. ( B. Pharmacy, 1st Year, Sem-II) Natural ResourcesEnergy Resources. ( B. Pharmacy, 1st Year, Sem-II) Natural Resources
Energy Resources. ( B. Pharmacy, 1st Year, Sem-II) Natural Resources
 
Seal of Good Local Governance (SGLG) 2024Final.pptx
Seal of Good Local Governance (SGLG) 2024Final.pptxSeal of Good Local Governance (SGLG) 2024Final.pptx
Seal of Good Local Governance (SGLG) 2024Final.pptx
 
Mixin Classes in Odoo 17 How to Extend Models Using Mixin Classes
Mixin Classes in Odoo 17  How to Extend Models Using Mixin ClassesMixin Classes in Odoo 17  How to Extend Models Using Mixin Classes
Mixin Classes in Odoo 17 How to Extend Models Using Mixin Classes
 
The basics of sentences session 2pptx copy.pptx
The basics of sentences session 2pptx copy.pptxThe basics of sentences session 2pptx copy.pptx
The basics of sentences session 2pptx copy.pptx
 
TỔNG ÔN TẬP THI VÀO LỚP 10 MÔN TIẾNG ANH NĂM HỌC 2023 - 2024 CÓ ĐÁP ÁN (NGỮ Â...
TỔNG ÔN TẬP THI VÀO LỚP 10 MÔN TIẾNG ANH NĂM HỌC 2023 - 2024 CÓ ĐÁP ÁN (NGỮ Â...TỔNG ÔN TẬP THI VÀO LỚP 10 MÔN TIẾNG ANH NĂM HỌC 2023 - 2024 CÓ ĐÁP ÁN (NGỮ Â...
TỔNG ÔN TẬP THI VÀO LỚP 10 MÔN TIẾNG ANH NĂM HỌC 2023 - 2024 CÓ ĐÁP ÁN (NGỮ Â...
 
Making and Justifying Mathematical Decisions.pdf
Making and Justifying Mathematical Decisions.pdfMaking and Justifying Mathematical Decisions.pdf
Making and Justifying Mathematical Decisions.pdf
 
Unit-IV- Pharma. Marketing Channels.pptx
Unit-IV- Pharma. Marketing Channels.pptxUnit-IV- Pharma. Marketing Channels.pptx
Unit-IV- Pharma. Marketing Channels.pptx
 
Grant Readiness 101 TechSoup and Remy Consulting
Grant Readiness 101 TechSoup and Remy ConsultingGrant Readiness 101 TechSoup and Remy Consulting
Grant Readiness 101 TechSoup and Remy Consulting
 
Advanced Views - Calendar View in Odoo 17
Advanced Views - Calendar View in Odoo 17Advanced Views - Calendar View in Odoo 17
Advanced Views - Calendar View in Odoo 17
 
Presentation by Andreas Schleicher Tackling the School Absenteeism Crisis 30 ...
Presentation by Andreas Schleicher Tackling the School Absenteeism Crisis 30 ...Presentation by Andreas Schleicher Tackling the School Absenteeism Crisis 30 ...
Presentation by Andreas Schleicher Tackling the School Absenteeism Crisis 30 ...
 

X Enterprises has the following comparative balance sheets and income.docx

  • 1. X Enterprises has the following comparative balance sheets and income statements 1.) What is the Earnings Before Interest? 2.) What is the Profit Margin ratio used in ROA? 3) What is the Return on Assets? Statement of Financial Position Income Statement for the year ending December 31, 12 Dec 31, 12 Dec 31, 11 Revenues $100.0 Total Assets $120 $100 Operating expenses 80.0 Total Liabilities 70 60 Interest Expense 6.0 Shareholders' equity 50 40 Income before Taxes 14.0 Tax Expense (30%) 4.2 Net Income 9.8 Solution Earning before interest = Revenue - Operating Expenses. (100-80=20) Profit Margin ration = Net Income/Net Sales. (9.8/214=0.45) Return on Asset = Net Income/Total Asset. (9.8/5.6=1.75)