Answered step by step
Verified Expert Solution
Link Copied!

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:

  1. Calculate the gross profit margin for each year.
  2. Compute the return on equity (ROE) for each year.
  3. Determine the net profit margin for each year.
  4. Calculate the quick ratio for 2023 if current assets are $1,200,000 and inventory is $600,000.
  5. Discuss the trend in profitability and liquidity over the three years.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting for Managers

Authors: Eric Noreen, Peter Brewer, Ray Garrison

4th edition

1259578542, 978-1259578540

More Books

Students also viewed these Accounting questions

Question

What factors affect region/community location decisions?

Answered: 1 week ago