An Appliance Store Has Total Assets of $2,800,000, Accounts Receivable

question 21

Multiple Choice

An appliance store has total assets of $2,800,000, accounts receivable of $900,000, accounts payable of $700,000, inventory valued at $1,500,000, and total liabilities of $2,500,000. In 1999, its net sales were $2,100,000, and its net profit equalled $42,000. Calculate the store's return on assets.

• A) 2.8 percent
• B) 71.4 percent
• C) 7.5 percent
• D) 1.5 percent
• E) 75 percent

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Definitions:

CEO

Chief Executive Officer; the highest-ranking person in a company or organization, responsible for making overarching decisions.

Naming a Successor

The process of identifying and appointing an individual to take over a role or position after the current holder leaves or retires.

Key Executive

A high-ranking individual in a company who has significant responsibility for managing an essential part of the business.

Operating Performance

An analysis of a company's efficiency and effectiveness in managing its resources and operations, often assessed through metrics like return on investment, profit margins, and productivity levels.