Exercise 14-8 Your answer is partially correct. Try again. Selected comparative

Question

Exercise 14-8 Your answer is partially correct. Try again. Selected comparative statement data for Molini Products Company are presented below. All balance sheet data are as of December 31 2014 2013 Net sales Cost of goods sold Interest expense Net income Accounts receivable Inventory Total assets Total common stockholders' equity $699,560 483,750 6,070 45,340 118,740 81,910 582,710 434,310 $684,350 401,680 5,490 34,770 102,210 78,720 540,070 322,070 Compute the following ratios for 2014. (Round all answers to 1 decimal place, eg. 1.6, or 1.6% .) Profit margin Asset turnover 6.41 % 8 times Return on assets Return on common stockholders' equity Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Profit margin 6.5% Asset Turnover 1.2 times Return on Assets 8.1% Return on Common Stockholder's Equity 12.0% Working: a. Profit margin = Net Income / Net Sales = $           45,340 / $       6,99,560 = 6.5% b. Asset Turnover = Net Sales / Average total assets = $       6,99,560 / $       5,61,390 =                      1.2 Working: Average total assets = (582710+540070)/2 = $       5,61,390 c. Return on assets = Net Income / Average total assets = $           45,340 / $       5,61,390 = 8.1% d. Return on common stockholders Equity = Net Income / Average common stockholders Equity = $           45,340 / $ 3,78,190 = 12.0% Average Common Stockholders Equity = (434310+322070)/2 = $       3,78,190

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.