The following financial statements were taken from the 2010 annual report of Presentations Company: Presentations Company Income
Question:
The following financial statements were taken from the 2010 annual report of Presentations Company:
Presentations Company
Income Statement
For the Year Ended December 31, 2010
Sales revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,228
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,751
Gross profit on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,477
Operating expenses: Depreciation— buildings and equipment . . . . . . . . . . . . . 102
Other selling and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,667
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,769
Income before interest and taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 708
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
Income before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 540
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 426
Requirements
1. Calculate the following ratios for the year ended December 31, 2010.
a. Debt- to- equity ratio
b. Gross margin percentage
c. Current ratio
d. Profit margin ratio
2. What do the ratios indicate about the success of Presentations? What additional information would help you analyze the overall performance of thiscompany?
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Financial Accounting: A Business Process Approach
ISBN: 978-0136115274
3rd edition
Authors: Jane L. Reimers