Question

You are given the following information for Smashville, Inc. Cost of goods sold: $169,000 Investment income:...

You are given the following information for Smashville, Inc.

Cost of goods sold: $169,000
Investment income: $1,300
Net sales: $282,000
Operating expense: $44,000
Interest expense: $7,400
Dividends: $5,000
Tax rate: 21 %
Current liabilities: $22,000
Cash: $21,000
Long-term debt: $92,000
Other assets: $37,000
Fixed assets: $120,000
Other liabilities: $6,000
Investments: $33,000
Operating assets: $64,000

  

Calculate the gross margin, the operating margin, return on assets, and return on equity. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Homework Answers

Answer #1

1. gross margin=gross profit/Net sales

gross profit=Net sales-cost of goods sold=282000-169000=113000

gross margin=113000/282000=40.07%

2. operating margin=operating profit/Net sales

operating profit=Gross profit-operating expesnes=113000-44000=69000

operating margin=69000/282000=24.47%

3. Net income=(Operating profit-Interest expenses+Investment income)*(1-tax rate)=(69000-7400+1300)*(1-21%)=49691

Total assets=Cash+Operating assets+other assets+Fixed assets+Investments=21000+64000+37000+120000+33000=275000

return on assets=Net income/Total assets=49691/275000=18.07%

4. Total assets=Total laibilities+Equity

Total laibilities=Current laibilities+Long term debt+other laibilities=22000+92000+6000=120000

Equity=Total assets-Total liabilities=275000-120000=155000

Return on Equity=Net income/Total equity=49691/155000=32.06%

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You are given the following information for Smashville, Inc. Cost of goods sold: $ 184,000 Investment...
You are given the following information for Smashville, Inc. Cost of goods sold: $ 184,000 Investment income: $ 1,600 Net sales: $ 387,000 Operating expense: $ 88,000 Interest expense: $ 7,400 Dividends: $ 6,000 Tax rate: 30 % Current liabilities: $ 12,000 Cash: $ 21,000 Long-term debt: $ 32,000 Other assets: $ 40,000 Fixed assets: $ 125,000 Other liabilities: $ 5,000 Investments: $ 36,000 Operating assets: $ 64,000    Calculate the gross margin, the operating margin, return on assets, and...
You are given the following information for Smashville, Inc. Cost of goods sold: $214,000 Investment income:...
You are given the following information for Smashville, Inc. Cost of goods sold: $214,000 Investment income: $2,200 Net sales: $328,000 Operating expense: $45,000 Interest expense: $7,400 Dividends: $8,000 Tax rate: 21 % Current liabilities: $16,000 Cash: $21,000 Long-term debt: $26,000 Other assets: $38,000 Fixed assets: $156,000 Other liabilities: $5,000 Investments: $42,000 Operating assets: $35,000    Calculate the gross margin, the operating margin, return on assets and return on equity. (Do not round intermediate calculations. Enter your answers as a percent...
ou are given the following information for Smashville, Inc. Cost of goods sold: $ 224,000 Investment...
ou are given the following information for Smashville, Inc. Cost of goods sold: $ 224,000 Investment income: $ 2,400 Net sales: $ 389,000 Operating expense: $ 90,000 Interest expense: $ 7,400 Dividends: $ 15,000 Tax rate: 35 % Current liabilities: $ 24,000 Cash: $ 21,000 Long-term debt: $ 24,000 Other assets: $ 40,000 Fixed assets: $ 136,000 Other liabilities: $ 5,000 Investments: $ 44,000 Operating assets: $ 37,000    During the year, Smashville, Inc., had 17,000 shares of stock outstanding...
You are given the following information for Smashville, Inc. Cost of goods sold: $254,000 Investment income:...
You are given the following information for Smashville, Inc. Cost of goods sold: $254,000 Investment income: $3,000 Net sales: $379,000 Operating expense: $84,000 Interest expense: $7,400 Dividends: $17,000 Tax rate: 21 % Current liabilities: $28,000 Cash: $21,000 Long-term debt: $8,000 Other assets: $38,000 Fixed assets: $169,000 Other liabilities: $5,000 Investments: $14,000 Operating assets: $41,000 During the year, Smashville, Inc., had 17,000 shares of stock outstanding and depreciation expense of $15,000. Calculate the book value per share, earnings per share, and...
You are given the following information for Smashville, Inc. Cost of goods sold: $229,000 Investment income:...
You are given the following information for Smashville, Inc. Cost of goods sold: $229,000 Investment income: $2,500 Net sales: $374,000 Operating expense: $82,000 Interest expense: $7,400 Dividends: $9,000 Tax rate: 21 % Current liabilities: $18,000 Cash: $21,000 Long-term debt: $23,000 Other assets: $41,000 Fixed assets: $166,000 Other liabilities: $5,000 Investments: $45,000 Operating assets: $37,000    During the year, Smashville, Inc., had 17,000 shares of stock outstanding and depreciation expense of $17,000. At the end of the year, Smashville stock sold...
You are given the following information for Smashville, Inc.   Cost of goods sold: $ 174,000 Investment...
You are given the following information for Smashville, Inc.   Cost of goods sold: $ 174,000 Investment income: $ 1,400 Net sales: $ 379,000 Operating expense: $ 86,000 Interest expense: $ 7,400 Dividends: $ 8,000 Tax rate: 40 % Current liabilities: $ 21,000 Cash: $ 21,000 Long-term debt: $ 46,000 Other assets: $ 38,000 Fixed assets: $ 130,000 Other liabilities: $ 3,000 Investments: $ 34,000 Operating assets: $ 64,000 During the year, Smashville, Inc., had 25,000 shares of stock outstanding and...
Problem 19-3 Performance Ratios (LO3, CFA6) You are given the following information for Smashville, Inc. Cost...
Problem 19-3 Performance Ratios (LO3, CFA6) You are given the following information for Smashville, Inc. Cost of goods sold: $154,000 Investment income: $1,800 Net sales: $287,000 Operating expense: $38,000 Interest expense: $7,400 Dividends: $13,000 Tax rate: 21 % Current liabilities: $20,000 Cash: $21,000 Long-term debt: $30,000 Other assets: $42,000 Fixed assets: $123,000 Other liabilities: $5,000 Investments: $38,000 Operating assets: $35,000    Calculate the gross margin, the operating margin, return on assets, and return on equity. (Do not round intermediate calculations....
Given the following information for Smashville, Inc., construct a balance sheet: Current liabilities: $ 24,000 Cash:...
Given the following information for Smashville, Inc., construct a balance sheet: Current liabilities: $ 24,000 Cash: $ 21,000 Long-term debt: $ 102,000 Other assets: $ 40,000 Fixed assets: $ 125,000 Other liabilities: $ 15,000 Investments: $ 36,000 Operating assets: $ 64,000
Given the following information for Smashville, Inc., construct a balance sheet: Current liabilities: $ 35,000 Cash:...
Given the following information for Smashville, Inc., construct a balance sheet: Current liabilities: $ 35,000 Cash: $ 21,000 Long-term debt: $ 99,000 Other assets: $ 36,000 Fixed assets: $ 163,000 Other liabilities: $ 18,000 Investments: $ 40,000 Operating assets: $ 35,000
Given the following information for Smashville, Inc., construct an income statement for the year: Cost of...
Given the following information for Smashville, Inc., construct an income statement for the year: Cost of goods sold: $ 119,000 Investment income: $ 2,300 Net sales: $ 292,000 Operating expense: $ 40,000 Interest expense: $ 7,400 Dividends: $ 11,000 Tax rate: 40 %    What are retained earnings for the year?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT