The Following Information Pertains to Bailey Company: Balance Sheet $31,20 \mathrm{X} 2$

question 24

Multiple Choice

The following information pertains to Bailey Company: Balance Sheet
At December $31,20 \mathrm{X} 2$
$\begin{array}{lrlr}\text { Current assets } & \$ 18,700 & \text { Current liabilities } & \$ 7,600 \\\text { Long-term assets } & 29,700 & \text { Long-term liabilities } & 13,250\\&&\text { Stockholders' equity }&27,550\\\text { Total assets }&\$ 48,400& \text { Total assets }&\$ 48,400 \end{array}$

Barnum Company
Income Statement
For the Year Ended December $31,20 \mathrm{X} 2$
$\begin{array}{lr}\text { Sales } & \$ 106,950 \\\text { Less: Cost of goods sold } & \underline{61,800) } \\\text { Gross profit } & \$ 45,150 \\\text { Less: Operating expenses } & \underline{31,700} \\\text { Operating income } & \$ 13,450 \\\text { Less other expenses: interest } & \underline{1,300) } \\\text { Income before taxes } & \$ 12,150 \\\text { Less: Income tax expense } & \underline{4,850) } \\\text { Net income } & \$ 7,300\end{array}$ There were 1,000 shares of common stock outstanding with a market value of $75 as of December 31, 20X2.Dividends declared and paid was $5 per share.The return on sales for 20X2 is _____.

• A)6.8%
• B)19.5%
• C)25.8%
• D)42.2%

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Definitions:

Business Strategy

A plan of action designed by an organization to achieve its long-term goals and secure a competitive position in the market.

Product Domain

The complete range of products that a company creates or plans to offer within its market.

Long-term Direction

The strategic goals and visions set by an organization to guide its operations, development, and decision-making processes over an extended period.

Functional Strategy

A specific, detailed plan aimed at achieving objectives in a particular business area, supporting the overall business strategy.