The Operating Profit After Tax of Calculus Ltd Is $10

question 2

Multiple Choice

The operating profit after tax of Calculus Ltd is $10 million and sales are $100 million. Asset turnover is 1.25 times p.a. What is Calculus Ltd's ROA?

• A) 10 per cent
• B) 12.5 per cent
• C) 20 per cent
• D) None of the above

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Definitions:

Bad Debts Expense

Represents the amount of receivables a company does not expect to collect and is recorded as an expense.

Merchandise Inventory

The goods a company holds for the purpose of sale to customers in the normal course of business.

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or disposal, reflecting the actual cash value of inventory.

Accounts Receivable

The sum customers owe a corporation for goods or services delivered but not yet compensated.