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Here are the financial statements for the Brown Division of EFG Corporation for the year ended December 31, Year 13: Brown Division Income Statement Description

Here are the financial statements for the Brown Division of EFG Corporation for the year ended December 31, Year 13:

Brown Division Income Statement

Description

Amount ($)

Sales revenue

1,250,900

Cost of goods sold

710,500

Gross margin

540,400

Operating expenses

300,500

Depreciation expense

65,700

Operating income

174,200

Nonoperating items

38,400

Gain on sale of investments

13,200

Net income

225,800

Brown Division Balance Sheet

Assets

Amount ($)

Cash

110,200

Accounts receivable

255,400

Merchandise inventory

215,300

Equipment less accumulated depreciation

340,000

Total assets

921,100


Liabilities and Stockholders' Equity

Amount ($)

Accounts payable

165,200

Notes payable

75,400

Stockholders' equity

680,500

Total liabilities and stockholders' equity

921,100

Required:

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

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