Net income of $40,000 and cost of goods sold of $240,000 gross profit rate was 40%, net sales were:?
Gross Profit Margin = Sales Revenue – COGS / Sales Revenue Gross Profit Margin = $400,000 - $240,000 / $400,000 Gross Profit Margin = $160,000 / $400,000 or 40% Algebraically, Net Sales must be $400,000 Net sales are calculated: Net sales = Gross sales – Sales returns and allowances. However, your information doesn't specify the value of any sales returns and allowances, so the all we can do is use Sales Revenue to calculate the gross profit rate. Net Income, is not required or useful in the calculation. Hope this helps ;-)
What is considered a good net profit margin in business?
I guess profit margins are not a matter of choice in competitive markets. Nevertheless Weighted Average Cost of Capital (WAAC) is a good measure of calculating required profit margins in each industry.WACC = ((E/V) * Re) + [((D/V) * Rd)*(1-T)]E = Market value of the company's equityD = Market value of the company's debtV = Total Market Value of the company (E + D)Re = Cost of Equity (Expected Rate of Return)Rd = Cost of Debt T= Tax RateA company is typically financed using a combination of debt (bonds) and equity (stocks). Because a company may receive more funding from one source than another, we calculate a weighted average to find out how expensive it is for a company to raise the funds needed to buy buildings, equipment, and inventory. For further details you like to check up following link of investinganswers.comWeighted Average Cost of Capital (WACC)
When sales is 500,000 and gross profit is 25%, what is the cost of goods sold?
Cost = 100%Gross profit = 25%Therefore sales = 125%If 125% = 500,000Then 100%= 500000/125 * 100 = 400,000Cost = 400,000.
Calculating gross and weekly wages need help!?
A.Salary 1.Maria's Job pays her $1500 a month. What is her gross weekly wage? 2. John grosses $27,000 a year. What is his gross weekly wage? B. Hourly: A regular work week is 40 hours. overtime pay is time and one-half. 1.Isabel drives truck for $8.75 an hour. if she worked 40 hours, what would her gross earning be for one week? 2. Manual is a word-processor operator. He makes $11.50 an hour. Determine his gross earnings for a week if he worked 52 hours. C. Straight Commission 1. A real estate agent earns 2.4% on the sale of a house priced at $89,950. What is her gross pay that day? 2. A salesperson receives step commission on sales calculated as follows: * 8% on first $1000 * 12% next $2000 * 20% on sales above $3000 3.Calculate the salesperson's earning in one week if their sales were as follows: Monday $1500.00 Tuesday $3000.00 Wednesday $ 970.00 Thursday $4563.81 Friday $2760.42 D. Salary Plus Commission 1. Emilio earns $150 per week plus 38% commission. He sells $1043.92 in one week, what is his gross weekly earning. 2. Mary earns $28,000 a year. One week she grossed $658.00 She had sold $1673.19 worth of merchandise. What is the rate of her commission E. Hourly Wage Plus Commission 1. Emma is a sales clerk at a bicycle shop. She is paid $6.25 per hour for 30 hours work week plus a commission of 8% of sales. In one week, her sales were $2319.75, what is her gross weekly earning? 2. Sam is paid $6.45 per hour for a 37.5 hour week plus 6% of sales for a week. What would Sam's sales have to be for him to earn $400 in a week? F. Piece Work 1. Jolene gets paid 17 cents a tree for tree planting up north. In one week she planted 2437 trees. What is her wage? 2. A seamstress is paid $9.55 for every pair of pants made. How many pants would have to be made to receive $525 a week?
My company makes an average of 500,000 net profit a year. How much should I value my company if I want to sell it?
I sold a small company like this before. Here are some things to note:It will depend on how many years your company have been around, and how much stable profitability a year have it achieved. If it’s been profitable for 1 year only, you’ll probably land around 1.67x to 2x in net revenue. The multiple increases if your company has been profitable for longer.Niche market is fine, you can sell via a business broker and they will work with you to find a buyer. Realistically, you will not get more than 5x of annual net profit because it is not a high growth, venture funded startup in a large market. People who tells you that you can get 7x has set unrealistic expectation to you. Consult with your business broker who has your best interest in mind (you have to choose a trustworthy broker).While eliminating 50% of administrative cost is nice to mention, the offer you are going to get is as it right now. During the process it’s best to not changing the structure of the company because it introduces new variable and it’s hard to determine how it’s perform without waiting.Think from the side of the buyer then you can reach more pleasant deal, how many years can they recoup their investment and start getting profitable. It will set realistic expectation for both sides so you can choose buyers better.It’s mostly like this: If your company has been profitable for 18 months, take that as an indication that your buyer might take a risk of maximum 18 more months to recoup investment and start making profit. It translate to the multiple that you can realistically offer.
If I buy an existing business for $350,000 and I'm getting net profits of $17-30K per month, would you consider that a good investment?
The going rate for a small business is 2.5 times net income. Which is essentially a 40% return on your money. While 40% return on your money might sound too good to be true for those who are used to smaller returns in the stock market, it's actually the norm in small companies. Thats because small companies are high risk investments. It doesn't take much to put small company out of business. It's not uncommon for a company of this size to have 1-2 customers making up 80% of sales. You lose a customer, you lose your business. And for that reason, it's a high risk investment, which means the ROI needs to be very fast for anyone to invest in the company. They can't risk. 5-10 year payback.When you invest in the stock market, specifically in mutual funds, you're essentially investing in large, billion dollar, established corporations that have proven cash flow and thousands of customers. Typically they have a lot of cash on hand to help them survive a downturn. Lower risk = lower ROI. For small companies, the ROI is usually calculated after paying a salary for the owner / operator of the company. If you work 30 hours per week and earn a $60k salary, that brings your company income down to about $140k (17k per month x 12 - 60k). That's about 40% ROI. So this deal fits the current market average.
How much yearly revenue or profit would make a company worth $1 million?
Many company has market valuues of $1,000,000 and they have $0 in revenues and $0 in profits.I realize this may seem a bit silly but that is exactly how the world works.I am always starting new companies and the people making a lot of money with my previous videogames, television shows, films, applications or websites are always interested in writing bigger and bigger checks for me.Let’s say I am starting a new company with $1,000,000 and I call 100 of my investors and I offer them a few shares in the company for as little as $10,000That is not even enough cash to buy a car but they know that check in my hands can multiply and eventually generate a massive profit of $100,000 after a few years.That is enough to buy a very nice and cool spanking new Mercedes Benz.Some people like my crazy and sometimes extremely profitable ideas, you know.So I open a bank account for the new company and I deposit 100 checks. Some are for more than $10,000 and some are for as much as $1,000,000Some people want to always buy 49% of my new ideas but I never let them.Wealth inequality and all that.I like to take money from the security guards and the nurses and the CIA agents and the cops and the prostitutes and the cashiers. The people at the bottom 40%, you know.At the end of the day, I have $1,000,000 in the bank account.As you can see, the company is only one day old and we already have a market value of $1,000,000 but we don’t have any sales yet or any profits.Now we go to work.
Financial Accounting Question!?
Arnold Corporation has been authorized to issue 40,000 shares of $100 par value, 8%, noncumulative preferred stock and 2,000,000 shares of no-par common stock. The corporation assigned a $5 stated value to the common stock. At December 31, 2011, the ledger contained the following balances pertaining to stockholders' equity. Preferred Stock $240,000 Paid-in Capital in Excess of Par Value-Preferred 56,000 Common Stock 2,000,000 Paid-in Capital in Excess of Stated Value-Common 5,700,000 Treasury Stock-Common (1,000 shares) 22,000 Paid-in Capital from Treasury Stock 3,000 Retained Earnings 560,000 The preferred stock was issued for land having a fair market value of $296,000. All common stock issued was for cash. In November, 1,500 shares of common stock were purchased for the treasury at a per share cost of $22. In December, 500 shares of treasury stock were sold for $28 per share. No dividends were declared in 2011. Prepare the journal entries for the: (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.) 1. Issuance of preferred stock for land. 2. Issuance of common stock for cash. 3. Purchase of common treasury stock for cash. 4. Sale of treasury stock for cash. Complete the stockholders' equity section at December 31, 2011. (Order multiple accounts in the standard format used in the text. Enter all amounts as positive amounts and subtract where necessary.)