Question
Using the financial data below calculate the following ratios: 1) Gross Profit Margin; 2) Net Profit Margin; 3) Return on Assets; 4) Days Sales Outstanding;
Using the financial data below calculate the following ratios: 1) Gross Profit Margin; 2) Net Profit Margin; 3) Return on Assets; 4) Days Sales Outstanding; 5) Quick Ratio. For EACH of these five ratios do the following: 1) calculate the value and 2) interpret the value in about one sentence. TO RECEIVE ANY CREDIT YOU MUST SHOW YOUR WORK, WITHIN THE PROVIDED WORK SPACE. FINAL ANSWERS ONLY WILL NOT CUT IT!
Balance Sheet
ASSETS LIABILITIES
Cash: $1,160,000 Current Liabilities: $173,000
A/R: 335,000 Non-current Liabilities: 4,158,000
Prepaid Expenses: 45,000 Total Liabilities: $4,331,000
Inventories: 92,000 STOCKHOLDERS EQUITY
Other Current Assets: 18,000 Common Stock: $20,000
Total current Assets: $1,650,000 Additional-Paid-In Capital: 580,000
Fixed Assets: $10,360,000 Retained Earnings: 7,196,000
Patents: 117,000 Total Stockholders Equity: $7,796,000
Total Non-current Assets: $10,477,000 Total Liabilities &
Total Assets: $12,127,000 Stockholders Equity: $12,172,000
Income Statement Data
Sales: $23,000,000
Cost of Sales: 14,360,000
Gross Margin: $8,640,000
Operating Expenses: $3,750,000
Operating Income: $4,890,000
Non-operating Expenses: 90,000
Net Income: $4,800,000
*outstanding shares are 1,000,000
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