Refer to the financial statements for Castile Products, Inc., in Exercise 16-8. Assets at the beginning of the year totaled $280,000, and the stockholders’ equity totaled $161,600.

Required:

Compute the following:

1. Gross margin percentage.

2. Net profit margin percentage.

3. Return on total assets.

4. Return on equity.

5. Was financial leverage positive or negative for the year? Explain.

Data From Exercise 16-8:

Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)

Transcribed Image Text:

This Year Last Year Sales ..... $79,000 $74,000 Cost of goods sold 52,000 48,000 Gross margin ...... 27,000 26,000 Selling and administrative expenses: Selling expenses Administrative expenses 8,500 8,000 12,000 11,000 Total selling and administrative expenses .... 20,500 19,000 Net operating income 6,500 7,000 Interest expense. 600 600 Net income before taxes . 5,900 6,400 Income taxes .. Net income ..... 2,360 2,560 3,540 3,840 Dividends to common stockholders 320 600 Net income added to retained earnings 3,220 3,240 Beginning retained earnings 26,660 23,420 Ending retained earnings $29,880 $26,660 ... ...