Question
The following financial statements pertain to the Davis Division of YZA Corporation for the year ended December 31, Year 11: Davis Division Income Statement Description
The following financial statements pertain to the Davis Division of YZA Corporation for the year ended December 31, Year 11:
Davis Division Income Statement
Description | Amount ($) |
Sales revenue | 1,050,400 |
Cost of goods sold | 578,300 |
Gross margin | 472,100 |
Operating expenses | 255,400 |
Depreciation expense | 55,000 |
Operating income | 161,700 |
Nonoperating items | 30,600 |
Gain on sale of land | 10,200 |
Net income | 202,500 |
Davis Division Balance Sheet
Assets | Amount ($) |
Cash | 82,600 |
Accounts receivable | 215,400 |
Merchandise inventory | 180,300 |
Equipment less accumulated depreciation | 290,000 |
Total assets | 768,300 |
Liabilities and Stockholders' Equity | Amount ($) |
Accounts payable | 130,200 |
Notes payable | 63,400 |
Stockholders' equity | 574,700 |
Total liabilities and stockholders' equity | 768,300 |
Required:
- Calculate the net profit margin for Davis Division.
- Determine the return on equity (ROE) for Davis Division.
- Compute the quick ratio for Davis Division.
- Evaluate the interest coverage ratio for Davis Division.
- Assess the Davis Division’s debt to total assets ratio.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started