Question

HM2010 12 Assigment 2017 V0S IRead-Only]-Word and ramse Design Layout References Maiings Review View Help 요 Telme,that you want te do 10. In 2015, the financial statements of Ultimate Medical Center reported $500,000 in tolal revenues and $145,000 in net income. The balance sheet showed net assets of $350,000. Calculate the operating margin ratio and the return on equily rate for Ulitinale Medical Center a. Operating margin ratio Type answer here b. Retum on equity rate Type answer here Uhinate Mod cal cademy 11. The year end balance sheet of Ultimate Medical Center show total fiabilties of $5,000,000, which includes a loan to expand services. Net worth at the balance sheet date was $ 4,000 000 Calculate the debt-to-worth ratio. a Type answer here 12. Using the inforrnation above, cakculate the delt-to-worth ratio assuming the operating revenues exceed operating expenses by 300,000G 4 a Type answer hore Reflection search

Answer 1

10 (a)

Operating profit ratio is the profitability ratio that expresses the operating profit as a percentage of sales

Operating Profit Ratio = Net Income/Total Revenue*100 = ($145000/$500000)*100 = 29%

10 (b)

Return on Equity is a profitability ratio that measures the ability of a firm to generate profits from its shareholders' investments.

ROE = Net Income/Shareholders equity*100 = ($145000/$350000)*100 = 41.43%