FS Managment Textboc wSJ The following balance sheet and income statement for Ce
ID: 2808217 • Letter: F
Question
FS Managment Textboc wSJ The following balance sheet and income statement for Central Manufacturing Corpor Balance Sheet Assets: Cash Income Statement $1,500 Sales (all credit) $57,500 Accounts Receivable 8,000 Cost of Goods Sold (33,500) Inventories 7,500 24,000 Land 15,000 Operating Expenses (20,000) Other Fixed Assets 14,000 Depreciation (1.000) 3,000 Liabilities & Owners Interest Expense (450) Equity Accounts Payable Long Term Debt 3,800 2,550 5,400 Taxes (850) Common Stock 30,000 Retained Earnings 6,800Explanation / Answer
Answer to Question 19:
Net Profit Margin = Net Income / Sales * 100
Net Income = Net Profit before Taxes – Taxes
Net Income = $2,550 - $850
Net Income = $1,700
Net Profit Margin = 1,700 / 57,500 * 100
Net Profit Margin = 2.96%
Answer to Question 20:
Return on Equity = Net Income / Total Equity * 100
Total Equity = Common Stock + Retained Earnings
Total Equity = $30,000 + $6,800
Total Equity = $36,800
Return on Equity = 1,700 / 36,800 * 100
Return on Equity = 4.62%
Answer to Question 21:
Operating Income Return on Investment = Operating Income / Total Investment * 100
Total Investment = Total Assets
Total Assets = $1,500 + $8,000 + $7,500 + $15,000 + $14,000
Total Assets = $46,000
Operating Income Return on Investment = 3,000 / 46,000 * 100
Operating Income Return on Investment = 6.52%
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