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The comparative financial statements prepared at December 31, 2015, for Prince Company showed the following summarized data: 2015 2014 Income statement: Sales revenue $ 190,000
The comparative financial statements prepared at December 31, 2015, for Prince Company showed the following summarized data: |
2015 | 2014 | ||||||
Income statement: | |||||||
Sales revenue | $ | 190,000 | * | $ | 167,000 | ||
Cost of goods sold | 112,000 | 100,000 | |||||
Gross profit | 78,000 | 67,000 | |||||
Operating expenses and interest expense | 56,000 | 53,000 | |||||
Pretax income | 22,000 | 14,000 | |||||
Income tax | 8,000 | 4,000 | |||||
Net income | $ | 14,000 | $ | 10,000 | |||
Balance sheet: | |||||||
Cash | $ | 4,000 | $ | 7,000 | |||
Accounts receivable (net) | 14,000 | 18,000 | |||||
Inventory | 40,000 | 34,000 | |||||
Operational assets (net) | 45,000 | 38,000 | |||||
$ | 103,000 | $ | 97,000 | ||||
Current liabilities (no interest) | $ | 16,000 | $ | 17,000 | |||
Long-term liabilities (10% interest) | 45,000 | 45,000 | |||||
Common stock (par $5) | 30,000 | 30,000 | |||||
Retained earnings | 12,000 | 5,000 | |||||
$ | 103,000 | $ | 97,000 | ||||
Respond to the following for 2015: (Round your answers to 1 decimal place.)
a. What was the gross profit percentage? b. What was the income tax rate? c. Compute the profit margin? d. What percentage of total resources was invested in operational assets? e. Compute the debt-to-equity ratio? f. What was the return on equity? g. What was the return on assets? h. Compute the financial leverage percentage?
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