10: Application of Financial Ratios Used to Measure ProfitabilityThe income statement of Garnet Mfg. Corp. for 2018 shows the following:Sales, netP 700,00015,000400,000Net credit salesCost of goods soldCost of goods manufacturedNet credit purchases410,000150,000225,00090,000212,50020,000Raw materials usedNet incomeTotal operating expensesDepreciationNet income90,000The balance sheet figures as of December 31, 2017 and 2018 are as follows:December 3120172018P12,500P 25,000Cash17,50028,750Marketable securities10,00020,000Accounts receivable, netInventories:25,00035,000Finished goodsWork in process22,50015,0003,750P 150,00037,50017,50010,000Raw materialsPrepaid expensesTotal current assets2,500P95,00037,500Investments117,500187,500Plant, property and equipment, net

Profitability for any company can be ascertained or determined through these financial ratios :…

10: Application of Financial Ratios Used to Measure Profitability The income statement of Garnet Mfg. Corp, for 2018 shows the following: Sales, net P 700,000 Net credit sales 15,000 Cost of goods sold Cost of goods manufactured Net credit purchases 400,000 410,000 150,000 225,000 90,000 212,500 Raw materials used Net income Total operating expenses Depreciation 20,000 Net income 90,000

10: Application of Financial Ratios Used to Measure Profitability The income statement of Garnet Mfg. Corp, for 2018 shows the following: Sales, net P 700,000 Net credit sales 15,000 Cost of goods sold Cost of goods manufactured Net credit purchases 400,000 410,000 150,000 225,000 90,000 212,500 Raw materials used Net income Total operating expenses Depreciation 20,000 Net income 90,000

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.4.10P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...

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