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
Sales = Cost of goods sold/(1 - Gross profit margin) = 105,000/(1 - 0.30 ) = $150,000
Total assets = Sales/(Total asset turnover)
= 150,000/0.50 = $300,000
Net profits after taxes = (ROA) × (Total assets)
= (0.02 ) × (300,000 ) = $6,000
Business
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