The following financial information relates to Smooth Suds Brewery Ltd. (amounts in thousands): Required For each year:

Question:

The following financial information relates to Smooth Suds Brewery Ltd. (amounts in thousands):

2018 2019 2020 $18,360 $25,840 $36,120 47,340 31,515 3,580 19,866 Sales Average total assets Average shareholders' equit

Required

For each year:

a. Calculate the return on equity. Comment on the trend in this ratio.

b. Calculate the return on assets. Comment on the trend in this ratio.

c. Calculate the company’s gross margin. Comment on the trend in this ratio.

d. Comment on the profitability of Smooth Suds Brewery Ltd.

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Understanding Financial Accounting

ISBN: 9781119406921

2nd Canadian Edition

Authors: Christopher D. Burnley

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Question Posted: Jul 26, 2019 07:56 AM

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The following financial information relates to Smooth Suds Brewery Ltd. (amounts in thousands): Required For each year:

Question:

2018 2019 2020 $18,360 $25,840 $36,120 47,340 31,515 3,580 19,866 Sales Average total assets Average shareholders' equity Net income Gross profit 23,715 14,664 31,965 22,415 1,845 715 9,180 13,954

Step by Step Answer:

a Return on Equity ROE 2018 715 14664 49 2019 1845 22415 82 2020 3580 31515 114 Smooth Suds return o...View the full answer

Understanding Financial Accounting

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