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The 2018 income statement of Adrian Express reports sales of $21,110,000, cost of goods sold of $12,700,000, and net income of $2,060,000. Balance sheet information
The 2018 income statement of Adrian Express reports sales of $21,110,000, cost of goods sold of $12,700,000, and net income of $2,060,000. Balance sheet information is provided in the following table.
ADRIAN EXPRESS Balance Sheet December 31, 2018 and 2017 | ||||
2018 | 2017 | |||
Assets | ||||
Current assets: | ||||
Cash | $ | 880,000 | $ | 950,000 |
Accounts receivable | 1,825,000 | 1,235,000 | ||
Inventory | 2,315,000 | 1,725,000 | ||
Long-term assets | 5,080,000 | 4,430,000 | ||
Total assets | $ | 10,100,000 | $ | 8,340,000 |
Liabilities and Stockholders' Equity | ||||
Current liabilities | $ | 2,118,000 | $ | 1,868,000 |
Long-term liabilities | 2,562,000 | 2,608,000 | ||
Common stock | 2,125,000 | 2,035,000 | ||
Retained earnings | 3,295,000 | 1,829,000 | ||
Total liabilities and stockholders' equity | $ | 10,100,000 | $ | 8,340,000 |
Industry averages for the following profitability ratios are as follows:
Gross profit ratio | 45 | % |
Return on assets | 25 | % |
Profit margin | 15 | % |
Asset turnover | 2.5 | times |
Return on equity | 35 | % |
Required:
1. Calculate the five profitability ratios listed above for Adrian Express. (Round your answers to 1 decimal place.)
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