Digital Relay has both preferred and common stock outstanding. The company reported the following information for 19X7:

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Digital Relay has both preferred and common stock outstanding. The comÂpany reported the following information for 19X7:

Net sales Interest expense Income tax expense Preferred dividends Net income Average assets Average common stockholders'

a. Compute the gross profit margin ratio, the return on equity and the return on assets, rounding calculations to two decimal places.
b. Does the firm have positive or negative financial leverage? Briefly exÂplain.

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Financial and Managerial Accounting the basis for business decisions

ISBN: 978-0078111044

16th edition

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

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Question Posted: Dec 27, 2017 02:09 AM

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Digital Relay has both preferred and common stock outstanding. The company reported the following information for 19X7:

Question:

Net sales Interest expense Income tax expense Preferred dividends Net income Average assets Average common stockholders' equity $1,500,000 120,000 80,000 25,000 130,000 1,100,000 400,000

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Gross Prfit margin 867 Return ...View the full answer

Financial and Managerial Accounting the basis for business decisions

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