Compute profitability ratios (Learning Objective 4)

Compute four ratios that measure Bonaparte’s ability to earn profits. The company’s comparative income statement follows. The data for 2004 are given as needed.

Did the company’s operating performance improve or deteriorate during 2006?

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BONAPARTE Comparative Income Statement Years Ended December 31, 2006 and 2005 Dollars in Thousands Net sales Cost of goods sold Selling and general expenses Interest expense Income tax expense Net income Additional data: Total assets Common stockholders' equity Preferred dividends Common shares outstanding during the year 2006 2005 2004 $174,000 $158,000 $ 93,000 $ 86,000 46,000 41,000 9,000 10,000 10,000 9,000 $ 16,000 $ 12,000 $204,000 $191,000 $171,000 $ 96,000 $ 89,000 $ 79,000 $ 3,000 $3,000 $ 0 20,000 20,000 18,000