HELP ACCOUNTING PROBLEM SOLVE Suppose selected comparative statement data for th
ID: 2597375 • Letter: H
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HELP
ACCOUNTING PROBLEM SOLVE Suppose selected comparative statement data for the giant bookseller Barnes & Noble are presented here. All balance sheet data are as of the end of the fiscal year (in millions) Net sales Cost of goods sold Net income Accounts receivable Inventory Total assets Total common stockholders' equity 2017 2016 $5,050 $5,000 3,000 4,201 161 109 1,2501,250 2,8503,250 961 1,101 75 75 Compute the following ratios for 2017. (Round asset turnover to 2 decimal places, ea 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 2.5%) (a) Profit margin (b) Asset turnover (c) Return on assets (d) Return on common stockholders' equity (e) Gross profit rate timesExplanation / Answer
COMPUTATION OF RATIOS FOR 2017:
Average values are calculated by adding values of 2016 and 2017 and dividing the sum by 2.
S NO. RATIOS FORMULA ANSWER A. Profit Margin (Net Income / Net sales) * 100 (75 / 5,050) * 100 = 1.48% B. Assets Turnover (Net sales / Average Total assets) (5,050 / 3,050) = 1.65 times C. Return on Assets (Net Income / Average Total Assets) * 100 (75 / 3,050) * 100 = 2.45% D. Return on Common Stockholder's equity (Net Income / Average stockholder's equity) * 100 (75 /1,031) * 100 = 7.27% E. Gross Profit Rate (Sales - cost of goods sold) / Net sales * 100 (2,050 / 5,050) * 100 = 40.6%Related Questions
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