Sydney’s Pizza is a national brand that sells frozen pizzas in grocery stores and convenience stores. Last year, it sold 2,000,000 pizzas at an average price of $6.25. The income statement and balance sheet for the firm are in the tables below.

REQUIRED:

a. What is the profit margin in dollar terms and as a percentage?

b. Compute asset intensity.

c. Compute leverage.

d. Compute ROE.

e. Compute contribution margin per unit.

f. Compute annual fixed cost base.

g. Compute breakeven point in sales units.

h. What is the profit earned in one year?

i. What are the days of inventory on hand?

j. What are the accounts receivable days?

k. What is the fixed asset turnover ratio?

l. What is the fixed cost percentage of sales for manufacturing?

m. What is the fixed cost percentage of sales for SG&A?

n. What is the gross margin percentage?

o. What is the selling and administrative cost percentage?

p. Is this firm doing well or not? Why?

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Sydney's Pizza Income Statement for the Year Ended 12/3/X Sales $12,500,000 100.0% Less: Variable Costs Manufacturing $3,350,000 26.8% SG&A $1,862,500 14.9% Total Variable Costs $5,212,500 41.7% Contribution Margin $7,287,500 58.3% Less: Fixed Costs Manufacturing $3,000,000 24.0% SG&A $2,320,000 18.6% Total Fixed Costs $5,320,000 42.6% Income Before Tax $1,967,500 15.7%