0.00 points as of Decemb 2014 2013 Liabilities and Owners\' Equity 2013 2014 Ass
ID: 2809926 • Letter: 0
Question
0.00 points as of Decemb 2014 2013 Liabilities and Owners' Equity 2013 2014 Assets Current liabilities 3,413 $ 3,846 3,416 165 Cash $ 4,607 $ 4,910 Accounts payable 6,702 8,149 Notes payable 17,357 19,350 Other 2,768 138 otal $28,666 32,409Total $ 6,319 S 7,427 Long-term debt $22,500 $ 19,000 Common stock and paid-in surplus Accumulated retained earnings $38,000 S 38,000 20.535 44,792 Fixed assets Net plant and equipment $58,688 S 76,810 Total $58,535 S 82,792 Total assets $87,354 $109.219 Total liabilities and owners equity $87,354 $ 109,219 SMOLIRA GOLF, INC. 2 014 Income Statement Sales Cost of goods sold Depreciation 205,227 138,383 5,910 EBIT 60,934 t paid S59,317 20,760 Taxable incomeExplanation / Answer
1. Profit margin = Net income/Sales = $38,557/$205,227 = 0.1879 = 18.79%
2. Total assets turnover = Sales/total assets
Total asset turnover = $205,227/$109,219 = 1.88 times
3.
Equity multiplier = Total assets/Total equity = $109,219/$82,792 = 1.32
4.
Return on equity = Profit margin * Total assets turnover * Equity multiplier
Return on equity = 18.79% * 1.88 * 1.32 = 0.4663 = 46.63%
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