Question
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:
- Calculate the net profit margin for Allen Division.
- Determine the return on equity (ROE) for Allen Division.
- Compute the quick ratio for Allen Division.
- Evaluate the interest coverage ratio for Allen Division.
- Assess the Allen Division’s debt to total assets ratio.
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