Use the financial statements of AJ Cardenas, Inc., in S13-6 and S13-7 to compute these profitability measures

Question:

Use the financial statements of AJ Cardenas, Inc., in S13-6 and S13-7 to compute these profitability measures for 2014. Show each computation.

a. Rate of return on sales

b. Asset turnover ratio

c. Rate of return on total assets

d. Leverage (equity multiplier) ratio

e. Rate of return on common stockholders’ equity

f. Is AJ Cardenas, Inc.’s profitability strong, medium, or weak?

Financial Statements
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... Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.