The following information has been extracted from the financial statements of XYZ Ltd for the year ended 31 December 2022:

Income Statement

• Sales revenue: $3,000,000
• Cost of goods sold: $1,200,000
• Operating expenses: $600,000
• Interest expense: $120,000
• Income tax expense: $180,000

Balance Sheet

• Cash and cash equivalents: $300,000
• Accounts receivable: $600,000
• Inventory: $400,000
• Property, plant and equipment (net): $1,800,000
• Total assets: $3,100,000
• Accounts payable: $200,000
• Accrued expenses: $100,000
• Long-term debt: $1,500,000
• Shareholders' equity: $1,300,000

Calculate the following ratios for XYZ Ltd:

a) Gross profit margin

b) Operating profit margin

c) Net profit margin

d) Return on assets

e) Return on equity

Answer rating: 100% (QA)

The detailed answer for the above question is provided below a Gross profit margin Gross profit Sale... View the full answer