The financial statements for Castile Products, Inc., are given below: Account ba

Question

The financial statements for Castile Products, Inc., are given below:

     Account balances at the beginning of the year were: accounts receivable, $150,000; and inventory, $330,000. All sales were on account. Assets at the beginning of the year totaled $1,010,000, and the stockholders’ equity totaled $715,000.

Gross margin percentage. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

Net profit margin percentage. (Round your answer to the nearest whole percentage place (i.e., 0.1234 should be entered as 12%).)

Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

Return on equity. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

The financial statements for Castile Products, Inc., are given below:

Explanation / Answer

1)

Gross margin:

= $930,000÷$2,150,000

= 43.26%

2)

Net margin:

= $235,900÷$2,150,000

= 11%

3)

Return on total assets:

= $235,900÷$1,444,000

= 16.3%

4)

Return on equity:

= $235,900÷$824,000

= 28.6%

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