Homework Answers
1. GROSS MARGIN RATIO= GROSS MARGIN / NET SALES*100
ATLANTA= 84000/210000*100 = 40%
BOSTON = 50600/230000*100 = 22%
RETURN ON SALES= NET INCOME/ NET SALES*100
ATLANTA = 16800/210000*100 = 8%
BOSTON = 18400 / 230000*100 = 8%
2. ATLANTA COMPANY HAS HIGH END RETAILER BASE, SINCE THE GROSS MARGIN ARE HIGHER FOR ATLANTA PRODUCT
3. ATLANTA BOSTON
EQUITY (A) $168000 $ 122700
NET INCOME (B) $ 16800 $ 18400
RETURN ON INVESTMENT(C=B/A) 10% 15%
MOST PROFITABLE BUSINESS IS BOSTON SINCE HIGHER RETURN ON INVESTMENT RATIO
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reports of the Atlanta Company and the Boston Company:
*All figures are reported in thousands of dollars.
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return-on-sales ratios of Atlanta and Boston. (Round your
answers to the nearest whole number.)
a-2. One of the companies is a high-end retailer that
operates in exclusive shopping malls. The other operates discount
stores located in low-cost, standalone...
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