Calculate the following profitability ratios for 2016. (Round answers to 1 decim

Question

Calculate the following profitability ratios for 2016. (Round answers to 1 decimal place, e.g. 50.1%.)

Oriole Medical
Comparative Balance Sheet
As of December 31 2016 2015 Assets Current assets   Cash $322,000 $417,450   Accounts receivable, net 1,065,000 776,500   Inventory 720,000 681,050   Other current assets 346,000 247,050 Total current assets 2,453,000 2,122,050 Property, plant, & equipment, net 9,273,955 8,398,315   Total assets $11,726,955 $10,520,365 Liabilities and Stockholders’ Equity Current liabilities $3,186,000 $2,846,050 Long-term debt 3,702,650 3,892,650   Total liabilities 6,888,650 6,738,700 Preferred stock, $5 par value 52,600 52,600 Common stock, $0.25 par value 120,000 103,900 Retained earnings 4,665,705 3,625,165   Total stockholders’ equity 4,838,305 3,781,665   Total liabilities and stockholders’ equity $11,726,955 $10,520,365

Explanation / Answer

a) Gross margin percentage = 5341000*100/10150000 = 52.6%

b) Return on assets = (1504090+246400)*100/11123660 = 15.7%

c) Return on common Stockholder's equity = (1504090-29550)*100/4309985 = 34.2%

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