Question

Selected information from Small Company’s financial statements follows.
Required:
1. Calculate the following ratios for 2010 and 2011:
(a) Gross profit margin,
(b) Operating margin,
(c) Net profit margin,
(d) Accounts receivable turnover.
2. For each of the first three ratios listed above provide a plausible explanation for any differences that exist. (For example, why is the net profit margin higher or lower than it was the previous year?)
3. Explain what each ratio attempts to measure. Make an assessment about Small Company based upon the ratios you have calculated. Are operations improving or worsening?


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  • CreatedSeptember 22, 2015
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