Problems 5-6 to 5-11 refer to the consolidated income statement and consolidated balance sheet of Tentacle...

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Problems 5-6 to 5-11 refer to the consolidated income statement and consolidated balance sheet of Tentacle Acres Company and Subsidiaries that follow. Tentacle Acres Company and Subsidiaries Income Statement for 2021 (000 dollars) Sales Cost of Goods Sold Gross Profit Selling and Administrative Expenses Depreciation and R&D Expense (both tax deductible) EBIT or Operating Income Interest Expense Interest Income Earnings Before Taxes (EBT) Income Taxes Net Income (NI) Earnings per Share Assets: Cash Marketable Securities Accounts Receivable (gross) Less: Allowance for Bad Debts Accounts Receivable (net) Inventory Prepaid Expenses Plant and Equipment (gross) Less: Accumulated Depreciation Tentacle Acres Company and Subsidiaries Balance Sheet as of End of 2021 (000 dollars) Plant and Equipment (net) Land Long-Term Investments Total Assets Liabilities: Accounts Payable Notes Payable Accrued Expenses Bonds Payable $94,001 46,623 47,378 28,685 5,752 12,941 Stockholders' Equity: Common Stock Retained Earnings Total Liabilities and Equity 48 427 13,320 4,700 8,620 1.72 $ 5,534 952 14,956 211 14,745 10,733 3,234 57,340 29,080 28,260 1,010 2,503 66,971 3,253 6,821 2,389 8,549 45.959 66,971 Profitability Ratios 5-6. Calculate the following profitability ratios for 2021. a. Gross profit margin b. Operating profit margin c. Net profit margin d. Return on assets e. Return on equity Comment on net profit margin and return on assets ratios if the industry averages for these two ratios are 5 percent and 14 percent, respectively. Problems 5-6 to 5-11 refer to the consolidated income statement and consolidated balance sheet of Tentacle Acres Company and Subsidiaries that follow. Tentacle Acres Company and Subsidiaries Income Statement for 2021 (000 dollars) Sales Cost of Goods Sold Gross Profit Selling and Administrative Expenses Depreciation and R&D Expense (both tax deductible) EBIT or Operating Income Interest Expense Interest Income Earnings Before Taxes (EBT) Income Taxes Net Income (NI) Earnings per Share Assets: Cash Marketable Securities Accounts Receivable (gross) Less: Allowance for Bad Debts Accounts Receivable (net) Inventory Prepaid Expenses Plant and Equipment (gross) Less: Accumulated Depreciation Tentacle Acres Company and Subsidiaries Balance Sheet as of End of 2021 (000 dollars) Plant and Equipment (net) Land Long-Term Investments Total Assets Liabilities: Accounts Payable Notes Payable Accrued Expenses Bonds Payable $94,001 46,623 47,378 28,685 5,752 12,941 Stockholders' Equity: Common Stock Retained Earnings Total Liabilities and Equity 48 427 13,320 4,700 8,620 1.72 $ 5,534 952 14,956 211 14,745 10,733 3,234 57,340 29,080 28,260 1,010 2,503 66,971 3,253 6,821 2,389 8,549 45.959 66,971 Profitability Ratios 5-6. Calculate the following profitability ratios for 2021. a. Gross profit margin b. Operating profit margin c. Net profit margin d. Return on assets e. Return on equity Comment on net profit margin and return on assets ratios if the industry averages for these two ratios are 5 percent and 14 percent, respectively.

Answer rating: 100% (QA)

Profitability Ratios for 2021 Given Gross Profit 47378 from Income Statement Operating Income EBIT 1... View the full answer