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[The following information applies to the questions displayed below.] The comparative financial statements prepared at December 31, 2015, for Prince Company showed the following summarized
[The following information applies to the questions displayed below.]
The comparative financial statements prepared at December 31, 2015, for Prince Company showed the following summarized data: |
2015 | 2014 | |||||
Income statement: | ||||||
Sales revenue | $ | 191,800 | * | $ | 167,300 | |
Cost of goods sold | 113,700 | 100,800 | ||||
Gross profit | 78,100 | 66,500 | ||||
Operating expenses and interest expense | 57,900 | 54,900 | ||||
Pretax income | 20,200 | 11,600 | ||||
Income tax | 7,200 | 3,600 | ||||
Net income | $ | 13,000 | $ | 8,000 | ||
Balance sheet: | ||||||
Cash | $ | 4,400 | $ | 5,700 | ||
Accounts receivable (net) | 15,600 | 17,300 | ||||
Inventory | 40,800 | 33,100 | ||||
Operational assets (net) | 45,300 | 36,400 | ||||
$ | 106,100 | $ | 92,500 | |||
Current liabilities (no interest) | $ | 15,300 | $ | 16,300 | ||
Long-term liabilities (9% interest) | 43,900 | 43,900 | ||||
Common stock (par $5) | 28,300 | 28,300 | ||||
Retained earnings | 18,600 | 4,000 | ||||
$ | 106,100 | $ | 92,500 | |||
*One-third was credit sales. Getting the last three wrong, can you please provide a solution with proof of work.
f. What was the return on equity? Return on equity 32.8 g. What was the return on assets? Return on assets 13.01 % h. Compute the financial leverage percentage? Financial leverage percentage 19.8Step by Step Solution
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