Question

Calculate the profit margin ratio 2019 and 2018 as a percent Calculate the rate of return...

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

Homework Answers

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
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