Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Using the financial statements of AutoParts Inc. for the years ended December 31, 2023, 2022, and 2021, answer the following questions: AutoParts Inc. Comparative Income
Using the financial statements of AutoParts Inc. for the years ended December 31, 2023, 2022, and 2021, answer the following questions:
AutoParts Inc. Comparative Income Statements for Years Ended December 31, 2023, 2022, and 2021:
- Sales: 2023: $1,800,000, 2022: $1,700,000, 2021: $1,500,000
- Cost of Goods Sold: 2023: $900,000, 2022: $850,000, 2021: $750,000
- Gross Profit: 2023: $900,000, 2022: $850,000, 2021: $750,000
- Operating Expenses: 2023: $300,000, 2022: $280,000, 2021: $250,000
- Net Income: 2023: $400,000, 2022: $380,000, 2021: $350,000
AutoParts Inc. Comparative Balance Sheets as of December 31, 2023, 2022, and 2021:
- Total Assets: 2023: $2,500,000, 2022: $2,300,000, 2021: $2,000,000
- Total Liabilities: 2023: $1,200,000, 2022: $1,100,000, 2021: $1,000,000
- Shareholders' Equity: 2023: $1,300,000, 2022: $1,200,000, 2021: $1,000,000
Requirements:
- Calculate the gross profit margin for each year.
- Compute the return on equity (ROE) for each year.
- Determine the net profit margin for each year.
- Calculate the quick ratio for 2023 if current assets are $1,200,000 and inventory is $600,000.
- Discuss the trend in profitability and liquidity over the three years.
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