Maggie’s Skunk Removal Corp.’s 2015 income statement listed net sales of $13.3 m

Question

Maggie’s Skunk Removal Corp.’s 2015 income statement listed net sales of $13.3 million, gross profit of $8.60 million, EBIT of $6.4 million, net income available to common stockholders of $4.0 million, and common stock dividends of $2.0 million. The 2015 year-end balance sheet listed total assets of $53.3 million and common stockholders' equity of $21.8 million with 2.0 million shares outstanding.

Calculate the profit margin. (Round your answer to 2 decimal places.)

Calculate the profit margin. (Round your answer to 2 decimal places.)

Calculate the profit margin. (Round your answer to 2 decimal places.)

Calculate the basic earnings power. (Round your answer to 2 decimal places.)

Calculate the return on assets. (Round your answer to 2 decimal places.)

Calculate the return on equity. (Round your answer to 2 decimal places.)

Calculate the dividend payout. (Round your answer to 2 decimal places.)

Calculate the profit margin. (Round your answer to 2 decimal places.)

Explanation / Answer

Answer: Profit Margin=( net income available to common stockholders/Net sales)*100

=($4/$13.3)*100

=30.08%

Answer: Gross Profit margin=(Gross Profit/Net sales)*100

=($8.6/$13.3)*100

=64.66%

Answer:Operating Profit margin=(EBIT/Net sales)*100

=($6.4/$13.3)*100

=48.12%

Answer: Basic earning power=EBIT/Total Assets

=$6.4/$53.3

=12%

Answer: Return on assets=( net income available to common stockholders/Total assets)*100

=($4/$53.3)*100

=7.5%

Answer:  Return on equity=( net income available to common stockholders/Total common stockholders' equity )*100

=($4/$21.8)*100

=18.35%

Answer: Dividend payout=Dividend/ net income available to common stockholders

=$2/$4

=50%

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