Exercise 12-10 Crane Medical manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income statement for 2015 and 2016 follow. 2015 Crane Medical Comparative Balance Sheet As of December 31 2016 Assets Current assets Cash $380,000 Accounts receivable, net 1,067,600 Inventory 717,000 Other current assets 368,000 Total current assets 2,532,600 Property, plant, & equipment, net 9,275,840 Total assets $11,808,440 $417,500 776,400 681,100 247,000 2,122,000 8,409,365 $10,531,365 Liabilities and Stockholders' Equity Current liabilities Long-term debt Total liabilities Preferred stock, $5 par value Common stock, $0.25 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $3,188,000 3,702,700 6,890,700 59,600 197,000 4,661,140 4,917,740 $11,808,440 $2,846,100 3,892,600 6,738,700 59,600 103,850 3,629,215 3,792,665 $10,531,365 Crane Medical Comparative Income Statement and Statement of Retained Earnings For the Year 2016 2015 Sales revenue (all on account) $10,260,000 $9,613,950 Cost of goods sold 4,996,000 5,298,700 Gross profit 5,264,000 4,315,250 Operating expenses 2,840,250 2,634,200 Net operating income 2,423,750 1,681,050 Interest expense 326,000 308,600 Net Income before taxes 2,097,750 1,372,450 629,325 $1,468,425 411,735 $960,715 Income taxes (30%) Net income Dividends paid Preferred dividends Common dividends Total dividends paid Net income retained Retained earnings, beginning of year Retained earnings, end of year 29,500 407,000 436,500 1,031,925 3,629,215 $4,661,140 29,500 436,000 465,500 495,215 $3,629,215 Calculate the following profitability ratios for 2016. (Round answers to 1 decimal place, e.g. 50.1%.) a. Gross margin percentage b. Return on assets C. Return on common stockholders' equity Exercise 12-10 Crane Medical manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income statement for 2015 and 2016 follow. 2015 Crane Medical Comparative Balance Sheet As of December 31 2016 Assets Current assets Cash $380,000 Accounts receivable, net 1,067,600 Inventory 717,000 Other current assets 368,000 Total current assets 2,532,600 Property, plant, & equipment, net 9,275,840 Total assets $11,808,440 $417,500 776,400 681,100 247,000 2,122,000 8,409,365 $10,531,365 Liabilities and Stockholders' Equity Current liabilities Long-term debt Total liabilities Preferred stock, $5 par value Common stock, $0.25 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $3,188,000 3,702,700 6,890,700 59,600 197,000 4,661,140 4,917,740 $11,808,440 $2,846,100 3,892,600 6,738,700 59,600 103,850 3,629,215 3,792,665 $10,531,365 Crane Medical Comparative Income Statement and Statement of Retained Earnings For the Year 2016 2015 Sales revenue (all on account) $10,260,000 $9,613,950 Cost of goods sold 4,996,000 5,298,700 Gross profit 5,264,000 4,315,250 Operating expenses 2,840,250 2,634,200 Net operating income 2,423,750 1,681,050 Interest expense 326,000 308,600 Net Income before taxes 2,097,750 1,372,450 629,325 $1,468,425 411,735 $960,715 Income taxes (30%) Net income Dividends paid Preferred dividends Common dividends Total dividends paid Net income retained Retained earnings, beginning of year Retained earnings, end of year 29,500 407,000 436,500 1,031,925 3,629,215 $4,661,140 29,500 436,000 465,500 495,215 $3,629,215 Calculate the following profitability ratios for 2016. (Round answers to 1 decimal place, e.g. 50.1%.) a. Gross margin percentage b. Return on assets C. Return on common stockholders' equity