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

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Chapter15: Financial Statement Analysis
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The financial statements for Castile Products, Incorporated, are given below:
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
Connon stock, $5 per value.
Retained earnings
Total stockholders equity
Total liabilities and stockholders' equity
Castile Products, Incorporated
Income Statement
For the Year Ended December 31
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Interest expense
Net incone before taxes
Income taxes (30%)
Net income
$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
883,000
$1,493,000
$ 2,290,000
1,220,000
1,070,000
580,000
490,000
32,000
458,000
137,400
$ 320,600
Transcribed Image Text:The financial statements for Castile Products, Incorporated, are given below: 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 Connon stock, $5 per value. Retained earnings Total stockholders equity Total liabilities and stockholders' equity Castile Products, Incorporated Income Statement For the Year Ended December 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net incone before taxes Income taxes (30%) Net income $24,000 230,000 370,000 9,000 633,000 860,000 $1,493,000 $ 290,000 320,000 610,000 $150,000. 733,000 883,000 $1,493,000 $ 2,290,000 1,220,000 1,070,000 580,000 490,000 32,000 458,000 137,400 $ 320,600
Account balances at the beginning of the year were: accounts receivable, $230,000; and inventory, $320,000. All sales were on
account. 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 as
12.34).
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 percentage
2. Net profit margin percentage
3. Return on total assets
4. Return on equity
5. Financial Leverage
%
%
Transcribed Image Text:Account balances at the beginning of the year were: accounts receivable, $230,000; and inventory, $320,000. All sales were on account. 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 as 12.34). 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 percentage 2. Net profit margin percentage 3. Return on total assets 4. Return on equity 5. Financial Leverage % %
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