Chapter 03 Financial Analysis Chapter 3 Financial Analysis Problems T. Profitability ratios (LO2) The Haines Corp. shows the following financial data for 2012 and 2013. 2013 3,230,000 S3,370,000 Sales Cost of goods sold 2,130,000 2350.000 1,100,000 520,000 Gross profit Selling & administrative expense 298,000 227,000 Operating profit 802,000 293,000 Interest expense 47.200 l600 754.800 241,400 ncome before taxes 264.180 4.490 ncome after taxes S490, 620 S 156,910 For each year, compute the following and indicate whether it is increasing or decreasing profitability in 2013 as indicated by the ratio, a. Cost of goods sold to sales. b. Selling and administrative expense to sales c. Interest expenses to sales 14. Du Pont system of analysis (LO3) Gates Appliances has a return-on-assets (investment ratio of 8 percent. a. If the debt-to-total-assets ratio is 40 percent, what is the return on equity? b. If the firm had no debt, what would the return-on- equity ratio be? 19. Average daily sales (LO2) Martin Electronics has an accounts receivable tumover equal to 15 times. If accounts receivable are equal to S80,000, what is the value for average daily credit sales