The financial statements for Castile Products, Incorporated, are given below:Castile Products, IncorporatedBalance SheetDecember 31AssetsCurrent assets:CashAccounts receivable, netMerchandise inventoryPrepaid expensesTotal current assetsProperty and equipment, netTotal assetsLiabilities and Stockholders' EquityLiabilities:Current liabilitiesBonds payable, 10%Total liabilities.StockholdersequityConnon stock, $5 per value.Retained earningsTotal stockholders equityTotal liabilities and stockholders' equityCastile Products, IncorporatedIncome StatementFor the Year Ended December 31SalesCost of goods soldGross marginSelling and administrative expensesNet operating incomeInterest expenseNet incone before taxesIncome taxes (30%)Net income$24,000230,000370,0009,000633,000860,000$1,493,000$ 290,000320,000610,000$150,000.733,000883,000$1,493,000$ 2,290,0001,220,0001,070,000580,000490,00032,000458,000137,400$ 320,600 Account balances at the beginning of the year were: accounts receivable, $230,000; and inventory, $320,000. All sales were onaccount. Assets at the beginning of the year totaled $1,010,000, and the stockholders' equity totaled $645,000.Required:Compute the following:Note: For Requirements 1 to 4, enter your percentage answers rounded to 2 decimal places (i.e., 0.1234 should be entered as12.34).1. Gross margin percentage.2. Net profit margin percentage.3. Return on total assets.4. Return on equity.5. Was financial leverage positive or negative for the year?1. Gross margin percentage2. Net profit margin percentage3. Return on total assets4. Return on equity5. Financial Leverage%%

Analysis of financial statements is an essential tool for all parties involved, such as creditors,…

Castile Products, Incorporated Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 10% Total liabilities Stockholders' equity! Common stock, 55 per value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 24,000 230,000 370,000 9,000 633,000 860,000 $1,493,000 290,000 320,000 610,000 $150,000. 733,000 863,000 $1,493,000

Castile Products, Incorporated Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 10% Total liabilities Stockholders' equity! Common stock, 55 per value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 24,000 230,000 370,000 9,000 633,000 860,000 $1,493,000 290,000 320,000 610,000 $150,000. 733,000 863,000 $1,493,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 20BEA: The income statement, statement of retained earnings, and balance sheet for Somerville Company are...

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