Financial statements for Askew Industries for 2018 are shown below (in thousands): _______________________________2018 Income Statement Sales................................................$ 9,000
Question:
Financial statements for Askew Industries for 2018 are shown below (in thousands):
_______________________________2018 Income Statement
Sales................................................$ 9,000
Cost of goods sold................................(6,300)
Gross profit..........................................2,700
Operating expenses...............................(2,000)
Interest expense.....................................(200)
Tax expense..........................................(200)
Net income..........................................$ 300
___________________________Comparative Balance Sheets
Required:
Calculate the following ratios for 2018.
1. Inventory turnover ratio
2. Average days in inventory
3. Receivables turnover ratio
4. Average collection period
5. Asset turnover ratio
6. Profit margin on sales
7. Return on assets
8. Return on shareholders' equity
9. Equity multiplier
10. Return on shareholders' equity (using the DuPont framework)
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
Step by Step Answer:
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas