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1. Compute the gross profit percentage in the current and previous years. Are the current-year results better, or worse, than those for the previous year? 2. Compute the net profit margin for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 3. Compute the earnings per share for the current and previous years. Are the current-year results better, or worse, than those for the previous year?

1. Compute the gross profit percentage in the current and previous years. Are the current-year results better, or worse, than those for the previous year? 2. Compute the net profit margin for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 3. Compute the earnings per share for the current and previous years. Are the current-year results better, or worse, than those for the previous year?

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter2: Financial Statements And The Annual Report
Section: Chapter Questions
Problem 2.8E: Income Statement Ratio The income statement of Holly Enterprises shows operating revenues of...
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Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 1-a. Compute the gross profit percentage in the current and previous years. (Round percentage values to 1 decimal place.) 1-b. Are the current-year results better, or worse, than those for the previous year? 1-a. Current Year % 1-a. Previous Year % 1-b. Current year gross profit percentage? < Required 1 Required 2 >
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 1-a. Compute the gross profit percentage in the current and previous years. (Round percentage values to 1 decimal place.) 1-b. Are the current-year results better, or worse, than those for the previous year? 1-a. Current Year % 1-a. Previous Year % 1-b. Current year gross profit percentage? < Required 1 Required 2 >
Strider Outfitters declared and paid a cash dividend of $8,900 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Current Year Previous Year Income Statement $ 225,000 98,000 127,000 59,000 6,300 $ 191,000 94,000 Sales Revenue Cost of Goods Sold Gross Profit 97,000 51,400 6,300 Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (30%) 61,700 18,510 39,300 11,790 $ 43,190 $ 27,510 Net Income Balance Sheet $ 99,515 40,000 48,000 118,000 $ 15,000 35,000 61,000 128,000 Cash Accounts Receivable, Net Inventory Property and Equipment, Net $ 305,515 $ 65,000 $ 239,000 $ 32,700 Total Assets Accounts Payable Income Tax Payable Notes Payable (long-term) 1,575 63,000 129,575 103,800 72,140 1,650 63,000 97,350 103,800 37,850 $ 239,000 Total Liabilities Common Stock (par $10) Retained Earnings Total Liabilities and Stockholders' Equity $ 305,515 Required: 1. Compute the gross profit percentage in the current and previous years. Are the current-year results better, or worse, than those for the previous year? 2. Compute the net profit margin for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 3. Compute the earnings per share for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 4. Stockholders' equity totaled $123,000 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 5. Net property and equipment totaled $133,000 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 6. Compute the debt-to-assets ratios for the current and previous years. Is debt providing financing for a larger or smaller proportion of the company's asset growth? 7. Compute the times interest earned ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 8. After Strider Outfitters released its current year's financial statements, the company's stock was trading at $41. After the release of its previous year's financial statements, the company's stock price was $38 per share. Compute the P/E ratios for both years. Does it appear that investors have become more (or less) optimistic about Strider's future success?
Transcribed Image Text:Strider Outfitters declared and paid a cash dividend of $8,900 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Current Year Previous Year Income Statement $ 225,000 98,000 127,000 59,000 6,300 $ 191,000 94,000 Sales Revenue Cost of Goods Sold Gross Profit 97,000 51,400 6,300 Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (30%) 61,700 18,510 39,300 11,790 $ 43,190 $ 27,510 Net Income Balance Sheet $ 99,515 40,000 48,000 118,000 $ 15,000 35,000 61,000 128,000 Cash Accounts Receivable, Net Inventory Property and Equipment, Net $ 305,515 $ 65,000 $ 239,000 $ 32,700 Total Assets Accounts Payable Income Tax Payable Notes Payable (long-term) 1,575 63,000 129,575 103,800 72,140 1,650 63,000 97,350 103,800 37,850 $ 239,000 Total Liabilities Common Stock (par $10) Retained Earnings Total Liabilities and Stockholders' Equity $ 305,515 Required: 1. Compute the gross profit percentage in the current and previous years. Are the current-year results better, or worse, than those for the previous year? 2. Compute the net profit margin for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 3. Compute the earnings per share for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 4. Stockholders' equity totaled $123,000 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 5. Net property and equipment totaled $133,000 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 6. Compute the debt-to-assets ratios for the current and previous years. Is debt providing financing for a larger or smaller proportion of the company's asset growth? 7. Compute the times interest earned ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 8. After Strider Outfitters released its current year's financial statements, the company's stock was trading at $41. After the release of its previous year's financial statements, the company's stock price was $38 per share. Compute the P/E ratios for both years. Does it appear that investors have become more (or less) optimistic about Strider's future success?
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