Question

Use the following data to answer questions below.

INCOME STATEMENT: TONY'S PIZZA EATERY 2016
	2016
REVENUES	$      275,789
COST OF GOODS SOLD	$      103,115
GROSS PROFIT	$      172,674
DEPRECIATION	$         31,100
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES	$         77,444
OPERATING INCOME (EBIT)	$         64,130
INTEREST EXPENSE	$           6,000
TAXABLE INCOME (EBT)	$         58,130
TAXES (SEE TAX TABLE)	$           8,720
NET INCOME	$         49,411

BALANCE SHEET: TONY'S PIZZA EATERY END OF 2016
	2016
CURRENT ASSETS
CASH	$       8,247
ACCOUNTS RECEIVABLE	$       1,236
INVENTORIES	$       6,432
TOTAL CURRENT ASSETS	$    15,915
FIXED ASSETS	$ 155,500
ACCUMULATED DEPRECIATION	$    31,100
NET FIXED ASSETS	$ 124,400
TOTAL ASSETS	$ 140,315
CURRENT LIABILITIES
ACCOUNTS PAYABLE	$       8,563
SHORT-TERM DEBT	$       2,341
TOTAL CURRENT LIABILITIES	$    10,904
LONG-TERM DEBT	$    75,000
TOTAL LIABILITIES	$    85,904
EQUITY	$       5,000
RETAINED EARNINGS	$    49,411
TOTAL OWNERS' EQUITY	$    54,411
TOTAL LIABILITIES + EQUITY	$ 140,315

1. What is Tony's Pizza Eatery's 2016 gross profit margin?

A. 62.6%

B. 23.3%

C. 21.1%

D. 37.4%

2. What was Tony's Pizza Eatery's net profit margin for 2016?

A. 62.6%

B. 23.3%

C. 21.1%

D. 17.9%

3. What was Tony's Pizza Eatery's 2016 return on assets?

A. 123.1%

B. 45.7%

C. 35.2%

D. 310.5%

4. What is the 2016 return on equity for Tony's Pizza Eatery?

A. 988.2%

B. 90.8%

C. 189.5%

D. 35.2%