Maggie’s Skunk Removal Corp.’s 2015 income statement listed net sales of $12.7 m

ID: 1174710 • Letter: M

Question

Maggie’s Skunk Removal Corp.’s 2015 income statement listed net sales of $12.7 million, gross profit of $8.30 million, EBIT of $5.8 million, net income available to common stockholders of $3.4 million, and common stock dividends of $1.4 million. The 2015 year-end balance sheet listed total assets of $52.7 million and common stockholders' equity of $21.2 million with 2.0 million shares outstanding.

Calculate the profit margin. (Round your answer to 2 decimal places.)

Calculate the basic earnings power. (Round your answer to 2 decimal places.)

Calculate the return on assets. (Round your answer to 2 decimal places.)

Calculate the return on equity. (Round your answer to 2 decimal places.)

Calculate the dividend payout. (Round your answer to 2 decimal places.)

Explanation / Answer

1)Profit Margin = Net income/Net Sales = 3.4/12.7 = 26.77%
2)Gross Profit margin = Gross Profit/Net sales = 8.30/12.70 = 65.35%
3)Operating Profit Margin = EBIT/Net Sales = 5.8/12.70 = 45.67%
4)Basic Earning Power = EBIT/Total Assets = 5.8/52.7 = 11.01%
5)Rturn on Assets = Net income/Total Assets = 3.4/52.7 = 6.45%
6)Return on Equity = Net income/Total Equity = 3.4/21.2 = 16.04%
7)Dividend Payout ratio = Dividedns/Net Income = 1.4/3.4 = 41.18%

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Maggie’s Skunk Removal Corp.’s 2015 income statement listed net sales of $12.7 m

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