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The following financial details are provided for the Martin Division of VWX Corporation for the year ended December 31, Year 10: Martin Division Income Statement

The following financial details are provided for the Martin Division of VWX Corporation for the year ended December 31, Year 10:

Martin Division Income Statement

Description

Amount ($)

Sales revenue

910,600

Cost of goods sold

503,900

Gross margin

406,700

Operating expenses

228,600

Depreciation expense

50,000

Operating income

128,100

Nonoperating items

26,800

Loss on sale of equipment

(9,100)

Net income

145,800

Martin Division Balance Sheet

Assets

Amount ($)

Cash

72,300

Accounts receivable

190,800

Merchandise inventory

160,300

Equipment less accumulated depreciation

250,000

Total assets

673,400


Liabilities and Stockholders' Equity

Amount ($)

Accounts payable

110,200

Notes payable

53,400

Stockholders' equity

509,800

Total liabilities and stockholders' equity

673,400

Required:

  1. Calculate the gross margin ratio for Martin Division.
  2. Determine the return on assets (ROA) for Martin Division.
  3. Compute the current ratio for Martin Division.
  4. Evaluate the debt to equity ratio for Martin Division.
  5. Assess the Martin Division’s operating margin.

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