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Current Attempt in Progress Partially correct answer icon Your answer is partially correct. Pharoah Medical manufactures hospital beds and other institutional furniture. The companys comparative

Current Attempt in Progress

Partially correct answer icon

Your answer is partially correct.

Pharoah Medical manufactures hospital beds and other institutional furniture. The companys comparative balance sheet and income statement for 2019 and 2020 follow.

Pharoah Medical Comparative Balance Sheet As of December 31
2020 2019
Assets
Current assets
Cash $387,000 $417,400
Accounts receivable, net 1,075,000 776,500
Inventory 727,000 681,100
Other current assets 381,350 247,050
Total current assets 2,570,350 2,122,050
Property, plant, & equipment, net 8,651,785 8,439,645
Total assets $11,222,135 $10,561,695
Liabilities and Stockholders Equity
Current liabilities $3,162,000 $2,846,000
Long-term debt 3,702,600 3,892,600
Total liabilities 6,864,600 6,738,600
Preferred stock, $5 par value 58,900 58,900
Common stock, $0.25 par value 104,650 103,900
Retained earnings 4,193,985 3,660,295
Total stockholders equity 4,357,535 3,823,095
Total liabilities and stockholders equity $11,222,135 $10,561,695

Pharoah Medical Comparative Income Statement and Statement of Retained Earnings For the Year
2020 2019
Sales revenue (all on account) $10,177,300 $9,613,900
Cost of goods sold 5,613,000 5,298,700
Gross profit 4,564,300 4,315,200
Operating expenses 2,840,300 2,634,200
Net operating income 1,724,000 1,681,000
Interest expense 300,300 308,650
Net income before taxes 1,423,700 1,372,350
Income taxes (30%) 427,110 411,705
Net income $996,590 $960,645
Dividends paid
Preferred dividends 29,550 29,550
Common dividends 433,400 413,100
Total dividends paid 462,950 442,650
Net income retained 533,690 517,995
Retained earnings, beginning of year 3,660,295 3,142,300
Retained earnings, end of year $4,193,985 $3,660,295

Calculate the following profitability ratios for 2020. (Round answers to 1 decimal place, e.g. 50.1%.)

a. Gross margin percentage %
b. Return on assets %
c. Return on common stockholders equity %

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