The following information pertains to Carlton Company. Assume that all balance s

Question

The following information pertains to Carlton Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

What is the rate earned on total assets for this company?

Select the correct answer.

1.1%

Assume the following sales data for a company:

What is the percentage increase in sales from 2014 to 2015?

Select the correct answer.

Assets Cash and short-term investments $42,067 Accounts receivable (net) 29,437 Inventory 29,297 Property, plant and equipment 208,770       Total Assets $309,571 Liabilities and Stockholders' Equity   Current liabilities $69,705   Long-term liabilities 90,218   Stockholders' equity-common 149,648       Total liabilities and stockholders' equity $309,571 Income Statement   Net Sales $81,173   Cost of goods sold 32,469   Gross margin 48,704   Operating expenses 22,679   Net income from operations $26,025 Interest expense 4,059       Net income $21,966   Number of shares of common stock 6,123   Market price of common stock $28

Explanation / Answer

Q. 2.) The percentage increase in sales from 2014 to 2015:-

   = 754818 - 526718 / 526718

   = 0.4331 i.e., 0.4331 * 100 = 43.31%

Conclusion:-The percentage increase in sales from 2014 to 2015 = 43.31%.

Q. 1.) The rate earned on total assets for this company = Earnings before interest & taxes (EBIT) / Total assets

= 26025 / 309571

= 0.084 i.e., 0.084 * 100 = 8.4%

Conclusion:- The rate earned on total assets for this company = 8.4%

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