Xulu Company Had the Following Income Statement for Last Year

question 64

Essay

Xulu Company had the following income statement for last year: $\begin{array}{lc}\text { Sales } & \$ 400,000 \\\text { Less: Cost of goods sold } & 220,000 \\\text { Gross profit } & \$ 180,000 \\\text { Less: Selling and administrative expense } & 80,000 \\\text { Operating income } & \$ 100,000\end{array}$ Beginning assets were $575,000,and ending assets were $625,000.
(Carry computations out to three decimal places.) A. $\quad$ What are the average operating assets?
B. $\quad$ What is the margin?
C. $\quad$ What is the turnover?
D. $\quad$ What is the ROI?

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Definitions:

Engine-Oil Additive

A substance added to engine oil to improve its properties, such as reducing friction, wear, or corrosion, and enhancing performance.

Sunk Cost

A cost that has already been incurred and cannot be removed and therefore should not be considered in an investment decision.

Straight-Line Depreciation

A method of allocating an asset's cost evenly over its useful life, resulting in a consistent depreciation expense each year.

Operating Costs

Expenses associated with the day-to-day functions of a business, excluding costs related to production or acquisition of goods.