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The following financial information pertains to the Robinson Division of JKL Corporation for the year ended December 31, Year 6: Robinson Division Income Statement Description

The following financial information pertains to the Robinson Division of JKL Corporation for the year ended December 31, Year 6:

Robinson Division Income Statement

Description

Amount ($)

Sales revenue

590,600

Cost of goods sold

332,800

Gross margin

257,800

Operating expenses

163,200

Depreciation expense

30,400

Operating income

64,200

Nonoperating items

14,600

Loss on sale of investments

(5,300)

Net income

73,500

Robinson Division Balance Sheet

Assets

Amount ($)

Cash

45,200

Accounts receivable

105,800

Merchandise inventory

92,400

Equipment less accumulated depreciation

150,000

Total assets

393,400


Liabilities and Stockholders' Equity

Amount ($)

Accounts payable

58,700

Notes payable

27,400

Stockholders' equity

307,300

Total liabilities and stockholders' equity

393,400

Required:

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

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