Question
Associated Industries Profit and Loss Statement 2016 2017 Sales Activities Revenue $375,000 $386,250 Cost of Goods Sold $211,056 $217,388 Gross Profit $163,944 $168,862 Operating Expenses
| Associated Industries |
|
|
|
| Profit and Loss Statement |
|
| |
|
|
| 2016 | 2017 |
| Sales Activities |
|
| |
| Revenue |
| $375,000 | $386,250 |
| Cost of Goods Sold | $211,056 | $217,388 | |
| Gross Profit |
| $163,944 | $168,862 |
| Operating Expenses |
|
| |
| Selling Expenses |
|
| |
| Advertising |
| $15,000 | $20,000 |
| Sales Staff Salary | $75,000 | $77,250 | |
| General and Administrative |
|
| |
| Rent |
| $22,500 | $22,500 |
| Utilities |
| $11,250 | $11,588 |
| Owners Salary | $15,750 | $15,750 | |
| Accounting, Payroll and Legal | $7,500 | $7,725 | |
| Depreciation |
| $2,250 | $2,250 |
| Operating Profit | $14,694 | $11,800 | |
| Interest |
| $0 | $0 |
| Profit Before Taxes | $14,694 | $11,800 | |
| Income Taxes | $3,086 | $2,478 | |
| Net Profit |
| $11,608 | $9,322 |
- Using the net profit amounts from the profit and loss statement for Associated Industries and the select data from the balance sheet in the table below:
Calculate return on assets and return on equity for the years 2016 and 2017. Also, calculate the change.
| Associated Industries |
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| |
| Select Balance Sheet Data |
|
| |
|
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| Year | Year |
|
|
| 2016 | 2017 |
| Total Assets |
| $270,000 | $316,402 |
| Total Equity |
| $94,500 | $103,822 |
| Associated Industries | Year | Year | Change | |
|
|
| 2016 | 2017 |
|
| Return on Assets |
|
|
| |
| Return on Equity |
|
|
| |
- What happened to Return on Assets and what are the drivers in the change between 2016 and 2017?
Answer:
- What happened to Return on Equity and what are the drivers in the change between 2016 and 2017?
Answer:
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Gapenskis Understanding Healthcare Financial Management
Authors: George H. Pink, Paula H. Song
8th Edition
1640551093, 978-1640551091
