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Analysis of Profitability Based on the financial statements of Cowan Kitchen Counters, Inc., as shown below: Cowan Kitchen Counters, Inc. Comparative Income Statement For Years
Analysis of Profitability
Based on the financial statements of Cowan Kitchen Counters, Inc., as shown below:
Cowan Kitchen Counters, Inc. Comparative Income Statement For Years Ended December 31, 20-2 and 20-1 | ||||
---|---|---|---|---|
20-2 | 20-1 | |||
Net Sales (all on account) | $2,584,000 | $2,163,000 | ||
Cost of goods sold | 1,868,200 | 1,616,800 | ||
Gross profit | $715,800 | $546,200 | ||
Operating expenses | 315,200 | 221,800 | ||
Other expense (interest) | 24,200 | 24,200 | ||
Income tax expense | 176,800 | 106,300 | ||
Net income | $199,600 | $193,900 |
Cowan Kitchen Counters, Inc. Comparative Balance Sheet December 31, 20-2 and 20-1 | ||||
---|---|---|---|---|
20-2 | 20-1 | |||
Cash | $255,400 | $243,200 | ||
Government notes | 250,000 | 250,000 | ||
Accounts receivable (net) | 903,500 | 797,500 | ||
Merchandise inventory | 983,600 | 913,600 | ||
Supplies and prepayments | 143,200 | 47,500 | ||
Land | 108,200 | 108,200 | ||
Building (net) | 330,000 | 390,600 | ||
Office equipment (net) | 17,700 | 15,000 | ||
Total assets | $2,991,600 | $2,765,600 | ||
Current liabilities (accounts payable) | $703,000 | $532,000 | ||
Bonds payable | 220,000 | 240,000 | ||
Total liabilities | $923,000 | $772,000 | ||
Common stock ($10 par, 180,000 shares) | $1,800,000 | $1,800,000 | ||
Retained earnings | 268,600 | 193,600 | ||
Total stockholders' equity | $2,068,600 | $1,993,600 | ||
Total liabilities and stockholders' equity | $2,991,600 | $2,765,600 |
Compute the following profitability measures for 20-2 (round all calculations to two decimal places):
a. Profit margin ratio | fill in the blank 1 | % |
b. Return on assets | fill in the blank 2 | % |
c. Return on common stockholders' equity | fill in the blank 3 | % |
d. Earnings per share of common stock | fill in the blank 4 |
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