Question

Refer to the information for Adrian Express in E12–5. Industry averages for the following profitability ratios are as follows:
Gross profit ratio .......... 45%
Return on assets ........... 25%
Profit margin ........... 15%
Asset turnover ........... 2.5 times
Return on equity .......... 35%
In E12–5, The 2015 income statement of Adrian Express reports sales of $19,310,000, cost of goods sold of $12,250,000, and net income of $1,700,000. Balance sheet information is provided in the following table.

.:.
Required:
1. Calculate the five profitability ratios listed above for Adrian Express.
2. Do you think the company is more profitable or less profitable than the industry average? Explain your answer.



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  • CreatedJuly 15, 2014
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