Question

Calculate the profit margin ratio 2019 and 2018 as a percent

Calculate the rate of return on total assets for 2019 and 2018 as a percent

Calculate the asset turnover ratio for 2019 and 2018 as a percent

Calculate the rate of return on common stockholder’s equity for 2019 and 2018 as a percent

Calculate the earnings per share for 2019 and 2018 as a percent

McKnight, Inc.
Comparative Income Statement
Years Ended December 31, 2019 and 2018
		Dollars in thousands	2019	2018	2017
		Net Sales Revenue	$182,000	$158,000
		Cost of Goods Sold	99,000	83,500
		Selling and Administrative Expenses	46,000	42,500
		Interest Expense	7,500	9,500
		Income Tax Expense	12,500	11,000
		Net Income	$17,000	$11,500
		Additional data:
		Total Assets	$204,000	$189,000	$165,000
		Common Stockholders' Equity	91,500	88,000	76,500
		Preferred Dividends	2,500	2,500	0
		Common Shares Outstanding During the Year	25,000	25,000	15,000

Answer 1

	2019	2018
Net Income (a)	$17,000	$11,500
Net sales revenue (b)	$182,000	$158,000
Profit Margin (a/b*100)	9%	7%
Net Income (a)	$17,000	$11,500
Average total assets [($204,000 + $189,000)/2]; [($189,000 + $165,000)/2] (b)	$196,500	$177,000
Rate of return on total assets (a/b*100)	9%	6%
Net sales revenue (a)	$182,000	$158,000
Average total assets [($204,000 + $189,000)/2]; [($189,000 + $165,000)/2] (b)	$196,500	$177,000
Asset turnover ratio (a/b*100)	93%	89%
Net Income (a)	$17,000	$11,500
Average common stockholders' Equity [($91,500 + $88,000)/2]; [($88,000 + $76,500)/2] (b)	$89,750	$82,250
Rate of return on common stockholders' Equity (a/b*100)	19%	14%
Net Income	$17,000	$11,500
Less: Preferred dividends	($2,500)	($2,500)
Earnings available to the common stockholders (a)	$14,500	$9,000
Average Common shares outstanding (b) [(25,000 + 25,000)/2]; [(25,000 + 15,000)/2]	25,000	20,000
Earnings per share (a/b)	$0.58	$0.45