1- The following are extracted from the financial statements of Frem, Inc., for 2010, 2009, and...

 

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1- The following are extracted from the financial statements of Frem, Inc., for 2010, 2009, and 2008. 2008 2010 $233,000 2009 $204,000 (124, 000) (110,000) (95,000) (81,500) Net sales Cost of sales Selling and administrative expenses Other income: Interest Other Earnings before tax and extraordinary credit Provision for income tax Earnings before extraordinary credit Extraordinary credit Total assets Long-term debt Common equity Preferred stock Preferred dividends Required: (3,700) 100 $ 10,400 5. 6. 7. (4,800) 5,600 5.600 $202,000 24,600 123,000 4,000 280 a. Compute the following ratios for 2010 and 2009. 1. 2. 3. (3,050) 1,175 $ 10,625 (4,740) 5,885 1,510 $7.395 $173,000 17,400 116,800 4,000 280 Net profit margin Total asset turnover $161,000 15,200 112,800 4,000 280 Return on assets Return on investment Return on total equity Return on common equity Gross profit margin b. Discuss the trend in profitability and identify specific causes for the trend. 1- The following are extracted from the financial statements of Frem, Inc., for 2010, 2009, and 2008. 2008 2010 $233,000 2009 $204,000 (124, 000) (110,000) (95,000) (81,500) Net sales Cost of sales Selling and administrative expenses Other income: Interest Other Earnings before tax and extraordinary credit Provision for income tax Earnings before extraordinary credit Extraordinary credit Total assets Long-term debt Common equity Preferred stock Preferred dividends Required: (3,700) 100 $ 10,400 5. 6. 7. (4,800) 5,600 5.600 $202,000 24,600 123,000 4,000 280 a. Compute the following ratios for 2010 and 2009. 1. 2. 3. (3,050) 1,175 $ 10,625 (4,740) 5,885 1,510 $7.395 $173,000 17,400 116,800 4,000 280 Net profit margin Total asset turnover $161,000 15,200 112,800 4,000 280 Return on assets Return on investment Return on total equity Return on common equity Gross profit margin b. Discuss the trend in profitability and identify specific causes for the trend.

Answer rating: 100% (QA)

a Particulars 2010 2009 Net sales a 233000 204000 Net profit b 5600 7395 Total assets c 202000 17300... View the full answer