HomeworkLib
Question

A company has sales of $2.5m, a gross margin percent of 40% and a net income...

A company has sales of $2.5m, a gross margin percent of 40% and a net income of $500,000. The balance sheet shows total assets of $1.1m; total liabilities of $600,000; retained earnings of $350,000 and notes payable of $150,000.

Please calculate the following:

a.   Return on Equity:
b.   Profit margin:
c.   Return on Assets:
d.   Cost of goods sold:

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

a.

ROE = 500,000/350,000 = 142.86%

b.

Profit Margin = 500,000/2,500,000 =20.%

c.

ROA = 500,000/(600,000 + 350,000 + 150,000) = 45.45%

d.

COGS = 0.60(2,500,000) = $1,500,000

0 0
Add a comment
Know the answer?
Add Answer to:
A company has sales of $2.5m, a gross margin percent of 40% and a net income...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Income Statement Sales revenue $50 Cost of goods sold 30 Gross profit (gross margin) 20 Selling...

    Income Statement Sales revenue $50 Cost of goods sold 30 Gross profit (gross margin) 20 Selling and administrative expenses 10 Income before taxes A Income tax expense 4 Net Income $6 Earnings per share E Balance Sheet Cash $2 Liabilities: Inventory 5 Accounts payable $1 Current assets B Equipment, at cost 10 Shareholders’ Equity: Less: accumulated depreciation C Common stock, $1 par value per share 10 Equipment, net of depreciation 6 D Total assets $13 Total liabilities and s/equity $13...

  • 3 3.   Complete the balance sheet and sales information in the table that follows J. White...

    3 3.   Complete the balance sheet and sales information in the table that follows J. White Industries using the following financial data: Debt ratio = 60% (Total Liabilities/Total Assets)       Quick ratio = 0.95   (Current Assets-inventory)/Current Liabilities Total asset turnover = 2.00 Sales/Total Asset Days sales outstanding = 24 days (Accounts receivable/(sales÷365))   Gross profit margin = 20% (Sales – cost of goods sold)/sales       Inventory turnover = 8.0 Cost of goods sold/inventory Balance Sheet Cash                   Accounts...

  • Consider the following financial data for J. White Industries: Total assets turnover: 1.5 Gross profit margin...

    Consider the following financial data for J. White Industries: Total assets turnover: 1.5 Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 30% Total liabilities-to-assets ratio: 35% Quick ratio: 0.85 Days sales outstanding (based on 365-day year): 36 days Inventory turnover ratio: 6.0 The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet Complete the balance sheet and sales information...

  • The financial statements of Snapit Company are given below. Snapit Company Income Statement (2009) Sales $...

    The financial statements of Snapit Company are given below. Snapit Company Income Statement (2009) Sales $ 4,000,000 Cost of goods sold 3,040,000 Gross profit 960,000 Selling & administrative expenses 430,000 Operating profit 530,000 Interest expense 160,000 Income before tax 370,000 Tax expense 148,000 Net income $ 222,000 Balance Sheet 2009 2008 Cash $ 60,000 $ 50,000 Accounts receivable 550,000 500,000 Inventory 690,000 620,000 Total current assets $ 1,300,000 $ 1,170,000 Fixed assets 1,300,000 1,230,000 Total assets $ 2,600,000 $ 2,400,000...

  • Based on the Income Statement and Balance Sheet for the XYZ Corporation (see below):     a)   ...

    Based on the Income Statement and Balance Sheet for the XYZ Corporation (see below):     a)    create the Pro Forma statement for 2018 given the following assumptions: - sales increase by 20% - all items vary directly with sales (except for Notes Payable, LTD, Owners Equity) - the company is currently operating at 100% capacity - the dividend payout ratio stays at 50%     Income Statement 2017 Pro Forma 2018 Sales $3,000,000 Cost of Goods Sold 2,000,000 Depreciation 300,000 EBIT...

  • Return Ratios and Leverage The following selected data are taken from the financial statements of Cedar...

    Return Ratios and Leverage The following selected data are taken from the financial statements of Cedar Industries: Sales revenue $663,000 Cost of goods sold 387,000 Gross profit $276,000 Selling and administrative expense 100,000 Operating income $176,000 Interest expense 50,000 Income before tax $126,000 Income tax expense (40%) 50,400 Net income $75,600 Accounts payable $45,000 Accrued liabilities 70,000 Income taxes payable 10,000 Interest payable 25,000 Short-term loans payable 150,000 Total current liabilities $300,000 Long-term bonds payable $500,000 Preferred stock, 10%, $100...

  • 2018 2017 Income Statement Information Sales revenue Cost of goods sold Net income $ $ 10,440,000...

    2018 2017 Income Statement Information Sales revenue Cost of goods sold Net income $ $ 10,440,000 6,827,760 360,000 8,400,000 5,900,000 248,000 Balance Sheet Information Current assets Long-term assets $ 1,600,000 2,200,000 $ 1,500,000 1,900,000 Total assets $ 3,800,000 $ 3,400,000 $ Current liabilities Long-term liabilities Common stock Retained earnings 1.200,000 1,500,000 800,000 300,000 900.000 1,500,000 800,000 200,000 Total liabilities and stockholders' equity 3,800,000 $ 3,400,000 Required: 1. Calculate the following profitability ratios for 2018 (Round your answers to 1 decimal...

  • Find the profit margin, ROA, and ROE for each period. X2 X3 X4 $2,500,000 3.200,000 3,500,000...

    Find the profit margin, ROA, and ROE for each period. X2 X3 X4 $2,500,000 3.200,000 3,500,000 4,000,000 1.900.000 2400.0002.700.000 3200.000 800,000 400,00D 25,000 200,000 10.000 20.000 30.000 60.000 15,000 107,500 COST OF GOODS SOLD GROSS PROFIT SELLING & ADMINISTRATIVE EXPENSE DEPRECIATION LEASES MISCELLANEOUS EXPENSE 600,000 400,000 800,000 800,000 400,000 160,000 190,000 138,700 25,000 175,000 170,000 89,000 EARNINGS BEFORE INTEREST & TAXES INTEREST EARNINGS BEFORE TAXES TAXES (35%) NET INCOME DIVIDENDS RETAINED EARNINGS 125,000 87,000 56,550 7,850 50,000 40,000 CASH ACCOUNTS...

  • Balance Sheet and Income Statement ASSETS 2015 2014 CASH AND MARKETABLE SECURITIES 29,000 25,000 ACCOUNTS RECEIVABLE...

    Balance Sheet and Income Statement ASSETS 2015 2014 CASH AND MARKETABLE SECURITIES 29,000 25,000 ACCOUNTS RECEIVABLE 116,000 100,000 INVENTORIES 145,000 125,000 CURRENT ASSETS 290,000 250,000 GROSS PLANT AND EQUIPMENT 362,000 350,000 LESS: ACCUMULATED DEPRECIATION 130,000 100,000 NET FIXED ASSETS 232,000 250,000 TOTAL ASSETS 522,000 500,000 LIABILITIES AND EQUITY ACCOUNTS PAYABLE 90,480 78,000 ACCRURALS 34,800 30,000 NOTES PAYABLE 25,420 34,000 CURRENT LAIBILITIES 150,700 142,000 LONG TERM DEBT 145,000 140,000 TOTAL LIABILITIES 295,700 282,000 COMMON STOCK ($1.00 par) 150,000 150,000 RETAINED EARNINGS...

  • Refer to the following financial statements for Crosby Corporation: CROSBY CORPORATION Income Statement For the Year...

    Refer to the following financial statements for Crosby Corporation: CROSBY CORPORATION Income Statement For the Year Ended December 31, 20X2 Sales $ 3,570,000 Cost of goods sold 2,200,000 Gross profit $ 1,370,000 Selling and administrative expense 687,000 Depreciation expense 309,000 Operating income $ 374,000 Interest expense 80,200 Earnings before taxes $ 293,800 Taxes 170,000 Earnings after taxes $ 123,800 Preferred stock dividends 10,000 Earnings available to common stockholders $ 113,800 Shares outstanding 150,000 Earnings per share $ 0.76 Statement of...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT