Question 10

Break-Even Analysis: XYZ Inc. manufactures gadgets. Below are the details for the year:

• Selling Price per Gadget: $100
• Variable Cost per Gadget: $60
• Total Fixed Costs: $200,000

Requirements:

1. Calculate the Contribution Margin per Gadget.
2. Determine the Break-Even Point in units.
3. Compute the Break-Even Point in dollars.
4. Analyze the margin of safety if the actual sales were $500,000.

1. Financial Analysis of Retail Company

Consider a retail company, ABC Stores, with the following financial data for the fiscal year ending 2023:

Particulars	Amount (in $ million)
Revenue	5,000
Cost of Goods Sold	3,200
Operating Expenses	1,200
Interest Expense	100
Taxes	100
Total Assets	6,000
Total Liabilities	2,500
Shareholders' Equity	3,500

Requirements:

1. Calculate the Gross Profit and Gross Profit Margin.
2. Determine the Operating Profit and Operating Profit Margin.
3. Compute the Net Profit and Net Profit Margin.
4. Calculate the Return on Assets (ROA) and Return on Equity (ROE).
5. Assess the company's debt-to-equity ratio.