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The Balance Sheet and the Income Statement of XYZ are presented below: Balance Sheet Cash $ 500,000 Accounts Receivable 2,000,000 Inventories 1,000,000 Current Assets
The "Balance Sheet" and the "Income Statement" of XYZ are presented below: Balance Sheet Cash $ 500,000 Accounts Receivable 2,000,000 Inventories 1,000,000 Current Assets 3,500,000 Net Fixed Assets 4,500,000 Total Assets $8,000,000 Accounts Payable $ 1,100,000 Accrued Expenses 600,000 Short-term notes payable 300,000 Current liabilities $ 2,000,000 Long-term debt 2,000,000 Owner's Equity 4,000,000 Total liabilities and owner's equity $ 8,000,000 Income Statement Net sales (all credit) $8,000,000 Cost of goods sold (3,300,000) Gross Profit $4,700,000 Operating Expenses (includes $500 depreciation) 3,000,000 Operating Income $ 1,700,000 Interest expense (367,000) Earnings before taxes $ 1,333,000 Income Taxes (40%) (533,000) Net Income $ 800,000 Calculate the following "ratios": f. Fixed assets turnover g. Total asset turnover h. Gross profit margin i. Operating profit margin j. Operating return on assets k. Return on equity
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