according to me
(a) Inventory Age turn over ratio
Average inventory*365/ CGS
526500*365/2632500= 73 days
b).
Return on capital employed (ROI) ?
=(Net Profit before interest, tax/Capital employed)*100
=(238,500/1,192,500)*100
=20%
now ABC obtain a long term loan on 10% but ROI of ABC co. ltd. is 20% so, company have the potential to pay interest . 10%
c).
Operating expenses = Gross profit-Net income
= 1,417,500-238,500
Operating expenses =1,179,000
guyes may b i m wrong please check out before send the anwer.
if,
net income = operating profit - tax- interest payment
am i right so, = 432,000-126,000-67,500
= 238,500
net income = 238500
operating profit = 432000
so, operating expenses ?
= gross profit - operating profit
=1417500-432000
=985500
operating expenses = 985500
Income tax not inculded in operating expenses. so
Operating expenses = Gross profit - net income - income tax - Interest expenses.
= 1417500 - 238500 - 126000 - 67500
= 985,500
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