Ch 12 Q8

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The comparative income statements and additional data for Rolling Hills Decor, Inc., follow: (Click the icon to view the comparative income statements.) (Click the icon to view the additional data.) Data Table Read the requirement Select the formula for each of the following component ratios, then calculate the ratios for 2018 and 2017. (Round ALL of your ans Ignore interest expense in your analysis.) Ratio Formula 2018 201 ROS AT ROA Average total assets/Average common stockholders' equity Cash + Short-term investments + Net current receivables / Current liabilities L Current assets / Current liabilities ROE Gross profit/Net sales Income from operations / Net sales (Net income - Preferred dividends) / Net sales (Net income - Preferred dividends) / Average number of common shares outstanding Net sales / Average total assets Rate of return on net sales x Asset turnover Rate of return on total assets (ROA) x Leverage Total assets/Total liabilities Total liabilities/ Total assets Rolling Hills Decor, Inc. Comparative Income Statements Years Ended December 31, 2018 and 2017 , 2018 2017 Net sales $ 190,000 $ 240,000 102,000 134,000 Cost of goods sold Gross profit 88,000 106,000 Selling and general expenses 44,000 49,000 Income from operations 44.000 57,000 9,000 Interest expense 7,000 Income before income tax 35,000 50,000 12,000 16.000 Income tax expense $ 23,000 $ 34,000 Net income Print Done Data Table 1 Requirement X 2018 2017 2016 $ 250,000 $ Total assets Common stockholders' equity Preferred dividends Average common shares outstanding during the year 300,000 $ 270,000 $ 104,000 $ 103,000 $ 15,000 $ 14,000 $ 102,000 3,000 $ 1. For 2018 and 2017, calculate return on sales, asset turnover, return on assets (ROA), leverage, return on common stockholders' equity (ROE), gross profit percentage, operating income percentage, and earnings per share to measure the ability to earn profits for Rolling Hills Decor, Inc. Perform a DuPont Analysis for ROA and ROE, and round each component ratio to three decimals places; for other ratio computations, round to two decimals. Did the company's operating performance improve or deteriorate during 2018? 24,000 23,000 22,000 Choose from Print 2 parts Done Print Done remaining