Question
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:
- Calculate the gross margin ratio for Martin Division.
- Determine the return on assets (ROA) for Martin Division.
- Compute the current ratio for Martin Division.
- Evaluate the debt to equity ratio for Martin Division.
- Assess the Martin Division’s operating margin.
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