Staples, inc. is one of the largest suppliers of office products in the united states.
suppose it had net income of $738.7 million and sales of $24,275.5 million in 2014. its total assets were $13,073.1 million at the beginning of the year and $13,717.3 million at the end of the year.

what is staples, inc.’s

(a) asset turnover

(b) profit margin?

(round to two decimals.) provide a brief interpretation of your results.

Assets turnover ratio = 1.81

profit Margin = 3.04 %

Explanation:

given data

net income = $738.7 million

sales = $24,275.5 million

total assets beginning = $13,073.1 million

total assets end  = $13,717.3 million

to find out

asset turnover  and profit margin

solution

first we get here Assets turnover ratio that is

Assets turnover ratio = net Sales ÷ Average total Assets     ...............1

Average total Assets  =

Average total Assets  = 13395.2

put here value we get

Assets turnover ratio =

Assets turnover ratio = 1.81

so that we can say that for the every dollar in assets Staples only generates =  1.33 cents

and

now we get profit Margin that is express as

profit Margin = Net Income ÷  net Sales      ....................2

put here value we get

profit Margin =

profit Margin = 3.04 %

we see here Profit margin ratio is low so that they only converted 3.04 % of their sale in to the profit

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