Requirements: 1. Present component percentages for 2015 only. 2. Respond to the

Question

Requirements:

1. Present component percentages for 2015 only.

2. Respond to the following for 2015:

What was the gross profit percentage?

What was the income tax rate?

Compute the profit margin?

What percentage of total resources was invested in operational assets?

Compute the debt-to-equity ratio?

What was the return on equity?

What was the return on assets?

Compute the financial leverage percentage?

a.

What was the gross profit percentage?

b.

What was the income tax rate?

c.

Compute the profit margin?

d.

What percentage of total resources was invested in operational assets?

e.

Compute the debt-to-equity ratio?

f.

What was the return on equity?

g.

What was the return on assets?

h.

Compute the financial leverage percentage?

Explanation / Answer

Component Percentage for 2015 1 Income Statement Amount $ % of Revenue Sales Revenue 191300 Cost of Goods Sold 113000 59.07 Gross Profit 78300 40.93 Operating Expenses 56100 29.33 Pre tax Income 22200 Income Tax 7100 3.71 Net income 15100 7.89 Balance Sheet Cash 5900 % of total Assets Accounts Receivables 14100 13.23 Inventory 41500 38.93 Operating Assets 45100 42.31 106600 Current Liablities 15500 14.54 Long term Liablities 44000 41.28 Common stock 29300 27.49 Retained Earnings 17800 16.70 106600 2 a What was the gross profit percentage? ($78300/$191300) X 100 40.93% b What was the income tax rate? ($7100/$22200)X 100 31.98% c Compute the profit margin? ($15100/$191300) x100 7.89% d What percentage of total resources was invested in operational assets? ($45100/$106600)x 100 42.31% e Compute the debt-to-equity ratio? Total Liablities / owners Equity 126% ($15500+$44000)/($29300+$17800) or say 1.26 time f What was the return on equity? ( Net Income / Share Holders Equity ) ($15100/$29300) 51.54% g What was the return on assets? (Net Income / Total Assets) ($15100/$106600) 14.17% h Compute the financial leverage percentage? EBIT/ ( EBIT-Interst) Gross Profit 78300 Less :Operating Expense $56100- $3960 Interest $ ($44000 x 9%) 52140 EBIT ( Earnings before interest and tax) 26160 Interst ($44000 x 9%) 3960 $26160/ ($26160-$3960) 1.18

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