A firm's annual sale amount to 4 times its total assets. It's profit on sale is 2.4%?

What is its rate of profit on its total assets?

Answers:
Let Sales = S and Assets = A, so S=4A
Profit on S = 2.4% or put another track,
Profit on 4A = 2.4%
So rate of profit on its total assets is 9.6%.
Check it out near a simple example. Let's influence Assets = $1,000, so Sales must be $4,000. Profit on Sales is 2.4% = $96. So a profit of $96 be made. $96 as a percentage of Assets of $1,000 is 96/1000 x 100 = 9.6%


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