For the year ended December 31, 2013, Indigo Corporation, earned an ROI of 11%.
ID: 2484762 • Letter: F
Question
For the year ended December 31, 2013, Indigo Corporation, earned an ROI of 11%. Sales for the year were $16 million, and average asset turnover was 1.8. Average stockholders' equity was $2.7 million.
Calculate Indigo Corporation's margin and net income. (Round your "margin" answer to 1 decimal place (i.e., 32.1).)
Margain ______%
Net Income ___________
For the year ended December 31, 2013, Indigo Corporation, earned an ROI of 11%. Sales for the year were $16 million, and average asset turnover was 1.8. Average stockholders' equity was $2.7 million.
Explanation / Answer
Asset Turnover Sales/Assets 1.8 assets sales/1.8 16/1.8 8.89 ROI Net Income/Assets 11% Net Income Assets*11% 8.89*11% 0.98 Margin Net Income/Sales 0.98/16 6.1% Return on Equity Net Income/Equity 0.98/2.7 36.3%