Comparative financial statements for Weller Corporation, a merchandising company
ID: 2579568 • Letter: C
Question
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 980,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock at the end of the year was $27. All of the company’s sales are on account.
Gross margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
Return on equity. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 980,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock at the end of the year was $27. All of the company’s sales are on account.
Explanation / Answer
Answer:
1
Gross margin percentage
=Gross margin/Sales
=36000/97000
=0.3711
=37.11%
____________________________________
2
Net profit margin percentage
=Net income/Sales
=6118 /97,000
=0.063072
=6.31%
___________________________________
3
Return on total assets.
=(net income +Interest Expanse) / average total Assets
=(6118+1050) / ($62,148 $54,570 )/2
=7168 /58359
=0.122826
=12.28%
__________________________________
4
Return on equity.
=Net income/ average Share holder's Equity
=6118 / (40658+34540) /2
=6118 /37599
=0.162717
=16.27%
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