Question

The simplified balance sheet and income statement for a corporation appear below.


Income Statement
For the Year Ended December 31, 2011
Net sales ............. $830,000
Cost of goods sold ......... 500,000
Gross margin ........... $330,000
Operating expenses ....... 260,000
Income before income taxes ..... $ 70,000
Income taxes .......... 10,000
Net income .......... $ 60,000
Total assets and stockholders’ equity at the beginning of 2011 were $360,000 and $280,000, respectively. Cash flows from operating activities were $72,000.Compute the following profitability measures:
(1) Profit margin,
(2) Asset turnover,
(3) Return on assets,
(4) Cash flow yield,
(5) Cash return on assets,
(6) Debt to equity ratio,
(7) Return on equity. (Note: Round to one decimalplace.)


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  • CreatedSeptember 10, 2014
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