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Selected Current Year End Financial Information for a Company Is

Question 152

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Selected current year end financial information for a company is presented below.Calculate the following company ratios:
(a)Profit margin.
(b)Total asset turnover.
(c)Return on total assets.
(d)Return on common stockholders' equity (assume the company has no preferred stock).
Net income……………………………….. $ 325,000
Net sales………………………………….. 4,700,000
Total liabilities,beginning-year………….. 550,000
Total liabilities,end-of-year……………… 530,000
Total stockholders' equity,beginning-year. 760,000
Total stockholders' equity,end-of-year….. 745,000

Correct Answer:

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(a)Profit margin = ($325,000/$4,700,000)...

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