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Here are the financial statements for the Allen Division of STU Corporation for the year ended December 31, Year 9: Allen Division Income Statement Description

Here are the financial statements for the Allen Division of STU Corporation for the year ended December 31, Year 9:

Allen Division Income Statement

Description

Amount ($)

Sales revenue

820,900

Cost of goods sold

452,500

Gross margin

368,400

Operating expenses

205,400

Depreciation expense

45,700

Operating income

117,300

Nonoperating items

23,400

Gain on sale of investments

7,200

Net income

147,900

Allen Division Balance Sheet

Assets

Amount ($)

Cash

65,200

Accounts receivable

162,400

Merchandise inventory

140,300

Equipment less accumulated depreciation

215,000

Total assets

582,900


Liabilities and Stockholders' Equity

Amount ($)

Accounts payable

90,600

Notes payable

43,200

Stockholders' equity

449,100

Total liabilities and stockholders' equity

582,900

Required:

  1. Calculate the net profit margin for Allen Division.
  2. Determine the return on equity (ROE) for Allen Division.
  3. Compute the quick ratio for Allen Division.
  4. Evaluate the interest coverage ratio for Allen Division.
  5. Assess the Allen Division’s debt to total assets ratio.

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