In an Effort to Analyze Clockwork Company Finances, Jim Realized

question 76

Essay

In an effort to analyze Clockwork Company finances, Jim realized that he was missing the company's net profits after taxes for the current year. Find the company's net profits after taxes using the following information.
Return on total assets = 2%
Total Asset Turnover = 0.5
Cost of Goods Sold = $105,000
Gross Profit Margin = 0.30

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Definitions:

Accounts Payable

Accounts payable is the amount a company owes to its suppliers or creditors for goods or services received but not yet paid for.

Inventory

Items and substances that a company stocks with the ultimate purpose of selling or further processing.

Perpetual Inventory System

A method of inventory management where inventory levels are updated in real-time after every sale or purchase transaction.