Selected comparative statement data for Mediocre Products Company are presented here. All balance sheet data are as of December 31.

Instructions

(a) What is the profit margin ratio for 2001?

(b) Calculate the return on assets ratio for 2001.

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2001 2000 Net sales $900,000 Cost of goods sold 480,000 $820,000 400,000 Interest expense 7,000 5,000 Net income 61,000 48,000 Accounts receivable 120,000 100,000 Inventory 190,000 180,000 Total assets 800,000 500,000 Total common stockholders' equity 450,000 310,000