(a)
Introduction:
Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.
To calculate:
The gross profit percentage for 2013 and 2012 and comment on the same.
(b)
Introduction:
Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.
To compute:
The net profit margin for 2012 and 2013 and state if the company was successful in controlling its operating expenses by comparing the data of both the years.
(c)
Introduction:
Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.
To calculate:
The fixed asset turnover ratio for 2012 and 2013 and comment on the same.
(d)
Introduction:
Return on equity measure the profit earned using capital provided by the shareholders of a firm or in other words we can say that
To calculate:
The return on equity for 2012 and 2013 and comment on the same.
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Managerial Accounting - With Access
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