interpret and analyze the ratios Gross profit marginGross profit margin= Gross profit' revenue*100YearGross profitRevenueGross profit marginNet profit margin2020201920184,163,17223,788,3713,339,69722,337,24814.9512%3,456,92523,707,28517.5008%14.5816%Net profit margin= net profit/ revenue*100YearNet profitRevenueNet profit margin2019236,336| 22,337,2481.0580%20202018445,76723,788,3711.8738%300,33223,707,2851.2668%Return on AssetsROA = Net Profit/Total AssetsYearNet profitTotal assets2020445,76726,507,9282019236,33625,944,7122018300,33226,751,0550.0112ROA0.01680.0091Return on EquityROE= Net Profit/Stockholder EquityYearNet profitStockholder Equity2020445,76711,239,2560.03962019236,33610,692,9282018300,33210,513,5390.0285ROE0.0221Earnings Per ShareEPS = Net Profit/Number of Common Shares OutstandingYearNet profit2020445,7679,250,0002019236,3369,250,0002018300,3329,250,000Number of CommonShares OutstandingEPS0.04810.02550.0324

Ratio analysis includes the comparison of the ratios with different companies and situations.

Gross profit margin Gross profit margin= Gross profit' revenue*100 Year Gross profit Revenue Gross profit margin Net profit margin 2020 4,163,172 23,788,371 17.5008% 2019 3,339,697 22,337,248 14.9512% 2018 | 3,456,925 |23,707,285 14.5816% Net profit margin= net profit' revenue*100 Year Net profit Revenue Net profit margin 2020 445,767 | 23,788,371 1.8738% 2019 236,336 22,337,248 1.0580% 2018 300,332 |23,707,285 | 1.2668% Return on Assets ROA = Net Profit Total Assets Year Net profit Total assets ROA Return on Equity 2020 445,767 26,507,928 0.0168 2019 236,336 | 25,944,712 0.0091 2018 300,332 26,751,055 0.0112 ROE= Net Profit/Stockholder Equity Year Net profit |Stockholder Equity ROE 2020 445,767 |11,239,256 0.0396 2019 236,336 10,692,928 0.0221 2018 300,332 10,513,559 0.0285 Earnings Per Share EPS = Net Profit/Number of Common Shares Outstanding Year Net profit Number of Common Shares Outstanding EPS 2020 445,767 9,250,000 2019 236,336 | 9,250,000 2018 300,332 9,250,000 | 0.0481 0.0255 0.0324

Gross profit margin Gross profit margin= Gross profit' revenue100 Year Gross profit Revenue Gross profit margin Net profit margin 2020 4,163,172 23,788,371 17.5008% 2019 3,339,697 22,337,248 14.9512% 2018 | 3,456,925 |23,707,285 14.5816% Net profit margin= net profit' revenue100 Year Net profit Revenue Net profit margin 2020 445,767 | 23,788,371 1.8738% 2019 236,336 22,337,248 1.0580% 2018 300,332 |23,707,285 | 1.2668% Return on Assets ROA = Net Profit Total Assets Year Net profit Total assets ROA Return on Equity 2020 445,767 26,507,928 0.0168 2019 236,336 | 25,944,712 0.0091 2018 300,332 26,751,055 0.0112 ROE= Net Profit/Stockholder Equity Year Net profit |Stockholder Equity ROE 2020 445,767 |11,239,256 0.0396 2019 236,336 10,692,928 0.0221 2018 300,332 10,513,559 0.0285 Earnings Per Share EPS = Net Profit/Number of Common Shares Outstanding Year Net profit Number of Common Shares Outstanding EPS 2020 445,767 9,250,000 2019 236,336 | 9,250,000 2018 300,332 9,250,000 | 0.0481 0.0255 0.0324

Accounting

27th Edition

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Chapter21: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 21.18EX

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