Compute the following ratio analysis:Return on EquityReturn on AssetsGross Profit MarginWrite your interpretation after the computation. BARRY'S SUPERSTOREBARRY'S SUPERSTOREComparative Year-End Income StatementsComparative Year-End Balance SheetsPrior YearCurrent YearPrior YearCurrent YearNet Sales$100,000$120,000Assets:Cost of Goods Sold50,00060,000Cash$90,000$110,000Gross Profit50,00060,000Accounts Receivable20,00030,000Inventory35,00040,000Rent Expense5,0005,500Short-Term Investments15,00020,000Total Current Asstes200,000Depreciation ExpenseSalaries Expense2,5003,600160,0003,0005,400Equipment40,00050,000Utility Expense1,5002,500Total Assets$200,000$250,000Operating Income38,00043,000Liabilities:Accounts Payable$ 60,000$ 75,000Interest Expense3,0002,000Unearned Revenue10,00025,000Income Tax Expense5,0006,000Total Current Liabilities70,000100,000Net Income$ 30,000$ 35,000Notes Payable40,00050,000Total Liabilities110,000150,000Stockholder EquityCommon Stock75,00080,000Ending Retained EarningsTotal Stockholder Equity15,00020,00090,000100,000Total Liabilities and Stockholder Equity$200,000$250,000

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Description: Compute the following ratio analysis:Return on EquityReturn on AssetsGross Profit MarginWrite your interpretation after the computation. BARRY'S SUPERSTOREBARRY'S SUPERSTOREComparative Year-End Income StatementsComparative Year-End Balance SheetsPrio

Return on equity measures the return of common stockholders in firm . it can be calculated Return on…

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Compute the following ratio analysis: Return on Equity Return on Assets Gross Profit Margin Write your interpretation after the computation.

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

Chapter5: Inventories And Cost Of Goods Sold

Section: Chapter Questions

Problem 5.9E: Working Backward: Gross Profit Ratio Acmes gross profit ratio increased by 20% over the prior year....

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Working Backward: Gross Profit Ratio Acmes gross profit ratio increased by 20% over the prior year. Net sales and cost of goods sold for the prior year were $120,000 and $90,000, respectively. Cost of goods sold for the current year is $140,000. Required Determine the amount of Acmes sales for the current year.
The following information is available for Cooke Company for the current year: The gross margin is 40% of net sales. What is the cost of goods available for sale? a. 5840,000 b. 960,000 c. 1,200,000 d. 1,220,000
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Income Statement for Year Ended December 31, 2018 (Millions of Dollars) Net sales 795.0 Cost of goods sold 660.0 Gross profit 135.0 Selling expenses 73.5 EBITDA 61.5 Depreciation expenses 12.0 Earnings before interest and taxes (EBIT) 49.5 Interest expenses 4.5 Earnings before taxes (EBT) 45.0 Taxes (40%) 18.0 Net income 27.0 a. Calculate the ratios you think would be useful in this analysis. b. Construct a DuPont equation, and compare the companys ratios to the industry average ratios. c. Do the balance-sheet accounts or the income statement figures seem to be primarily responsible for the low profits? d. Which specific accounts seem to be most out of line relative to other firms in the industry? e. If the firm had a pronounced seasonal sales pattern or if it grew rapidly during the year, how might that affect the validity of your ratio analysis? How might you correct for such potential problems?
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