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The average price of a gallon of gas in 2015 dropped $0.94 (28 percent) from $3.34 in 2014 (to $2.40 in 2015). Let's see whether

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The average price of a gallon of gas in 2015 dropped $0.94 (28 percent) from $3.34 in 2014 (to $2.40 in 2015). Let's see whether these changes are reflected in the income statement of Insignia Corporation for the year ended December 31, 2015 (amounts in billions) 2015 2014 Revenues $250 $262 Cost of Purchased Crude Oil and Products 116 121 Other Operating costs 57 Income before Income Tax Expense 77 Income Tax Expense Net Income $ 46 552 52 89 37 31 Required: 1. Compute the gross profit percentage for each year. Assuming that the change from 2014 to 2015 is the beginning of a sustained trend, is Insignia likely to earn more or less gross profit from each dollar of sales in 2016? 2. Compute the net profit margin for each year. Given your calculations here and in requirement 1, explain whether Insignia did a better or worse job of controlling expenses other than the costs of crude oil and products in 2015 relative to 2014 3. Insignia reported average net fixed assets of $195 billion in 2015 and $148 billion in 2014. Compute the fixed asset turnover ratios for both years. Did the company better utilize its investment in fixed assets to generate revenues in 2015 or 2014? 4. Insignia reported average stockholders' equity of $185 billion in 2015 and $148 billion in 2014. The company has not issued preferred stock. Compute the return on equity ratios for both years. Did the company generate greater returns for stockholders in 2015 or 2014? de Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 1-a. Compute the gross profit percentage for each year. (Round your answers to 1 decimal place.) 1-b. Assuming that the change from 2014 to 2015 is the beginning of a sustained trend, is insignia likely to earn more or less gross profit from each dollar of sales in 2016? 1-a. Gross Profit Percentage % 2014 2015 % 1-b. Likely to earn in 2016? More Gross Profit Less Gross Profit 2015 or 2014 quyos 10 both years. Did the company generate greater returns for stockholders in 7 Complete this question by entering your answers in the tabs below. Required: Required 2 Required 3 Required Book 2-a. Compute the net profit margin for each year. (Round your answers to 1 decimal place.) 2-b. Did Insignia do a better or worse job of controlling expenses other than the costs of crude oil and products in 2015 relative to 2014 20 Net Pront Marin 2014 2015 2b. Controlling expenses in 2015 va 20547 Better Job Worte Job Required 1 Required > > 2015 or 2014? unyos Tor both years. Did the company generate greater returns for stockholders in 77 int Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Required 4 BOOK 3-a. Insignia reported average net floed assets of $195 billion in 2015 and $148 bilion in 2014. Compute the fired asset turnover ratios for both years. (Round your answers to 2 decimal places.) 3-b. Did the company better utilize its investment in fixed assets to generate revenues in 2015 or 2014? He Fixed Asset Turnover 2014 2015 Print ferences 3-5. Investment better usluged in 2015 or 2014 O2015 2014 Complete this question by entering your answers in the tabs below. Sipood Required 1 Required 2 Required 3 Refuired 4 book 4-a. Insignia reported average stockholders' equity of $185 billion in 2015 and $148 billion in 2014. The company has not issued preferred stock. Compute the return on equity ratios for both years. (Round your answers to 1 decimal place.) 4-b. Did the company generate greater returns for stockholders in 2015 or 2014? Hon Return on Equity (ROE) 2014 2015 Print ferences 4-6. Greater retums generated in 2014 of 20157 2015 2014

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