The financial statements of Snapit Company are given below. Note: The common shares are trading in the stock market for $100 each.
Refer to the financial statements of Snapit Company.The firm's return on sales ratio for 2009 is
A)0.0133.
B)0.1325.
C)1.325.
D)1.260.

Question

The financial statements of Snapit Company are given below.   Note: The common shares are trading in the stock market for $100 each.
Refer to the financial statements of Snapit Company.The firm's return on sales ratio for 2009 is
A)0.0133. 
B)0.1325. 
C)1.325. 
D)1.260.

Quizplus · Accepted Answer

Return on sales ratio = Net income / Total sales
From the income statement for 2009:
Net income = $49,000
Total sales = $370,000
Return on sales ratio = $49,000 / $370,000 = 0.1325 or 13.25% 
Since the question does not specify a percentage or decimal, we assume it is asking for the ratio in decimal form. Therefore, the correct answer is B) 0.1325.

The Financial Statements of Snapit Company Are Given Below