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11 September, 02:14

Chambliss Corp.'s total assets at the end of last year were $385,000 and its EBIT was 62,500. What was its basic earning power (BEP) ?

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Answers (1)
  1. 11 September, 02:43
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    The answer is 16.23%

    Explanation:

    Basic Earning Power is a profitability ratio.

    The purpose of this is to know how effectively a business is using its assets to generate income or sales

    Basic Earning Power =

    EBIT/Total asset

    Total asset is $385,000

    EBIT is $62,500

    62,500/385,000

    =0.16233

    Express as a percentage =

    16.23%
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