Engagement Exerc eBook Video Calculator Analysis of Profitability Based on the f

Question

Engagement Exerc eBook Video Calculator Analysis of Profitability Based on the financial statements of Cowan Kitchen Counters, Inc., as shown below Cowan Kitchen Counters, Inc Comparative Income Statement For Years Ended December 31, 20-2 and 20-1 20-1 20-2 $2,578,500 1,875,900 Net Sales (all on account) Cost of goods sold Gross profit Operating expenses Other expense (interest) Income tax expense 313,500 24,200 176,800 $188,100 $2,170,000 1,621,600 $548,400 210,800 24,200 105,400 $208,000 Net income Cowan Kitchen Counters, Inc. Comparative Balance Sheet December 31, 20-2 and 20-1 20-1 $246,200 251,700 797,000 20-2 $259,500 Cash Government notes Accounts receivable (net) 251,700 903,000 Previous 0 more Check My Work uses remaining

Explanation / Answer

Return on Assets= Net income/ Average total Assets Average Total Assets=(2994700+2768000)/2           =188100/2881350*100 2881350            =6.53 Return on Common Stock Holders Equity=Net Income/Average Stockholders Equity         =188100/2031350*100 2031350        =9.26 Earnings Per Share of common stock=Net Income/No. of shares          =188100/180000*100         =104.5

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