The following information is available: Sales $189,400.00 Gross Profit $106,400.
ID: 2370306 • Letter: T
Question
The following information is available:Sales $189,400.00
Gross Profit $106,400.00
Net Income $25,800.00
Total Current Assets $32,400.00
Total Current Liabilities $34,400.00
Total Stockholders equity, last year $19,200.00
Total Stockholders equity, current year $26,800.00
Required:
Compute the following ratios: Please show work.
A) Current ratio
B) Gross profit rate
C) Return on sales
D) Return on stockholders' equity
Explanation / Answer
A. Current Raio = Current Assets/Current Liabilities = 32400/34400 = 0.94 B. Gross Profit Rate = Gross Profit/Sales = 106400/189400 = 56.18% C. Return on Sales = Net Profit / Sales = 25800/189400 = 13.62% D> Return on stockholders' equity = (net profit - preferred share dividends) / (shareholders equity- preferred shares) = 25800/26800 = 96.27%
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