Q1.Sanchez Software

Below are the two most recent balance sheets and most recent income statement for Sanchez Software. The company has an effective tax rate of 35%.

Balance Sheet

20202019

Assets:

Cash$10,000$6,000

Accounts Receivable (net)6,0001,500

Inventory8,00010,000

Long-lived assets12,00011,000

Less:Accumulated depreciation(4,000)(2,000)

Total assets$32,000$26,500

Liabilities and Stockholders' Equity:

Accounts payable$5,000$6,000

Deferred revenues1,0002,000

Long-term note payable10,00010,000

Less: Discount on note payable(800)(1,000)

Common stock12,0006,000

Retained earnings4,8003,500

Total liabilities and stockholders' equity$32,000$26,500

Income Statement

For the year ended December 31, 2020

Revenues$44,000

Cost of goods sold(24,000)

Depreciation expense(2,000)

Interest expense(3,000)

Bad debt expense(2,000)

Other expense (including income taxes)(9,000)

Net income$4,000

1.Refer to the information for Sanchez Software. The return on assets for Sanchez Software is:

2.Refer to the information for Sanchez Software. The return on common shareholders' equity for Sanchez Software is:

3.Refer to the information for Sanchez Software. The profit margin for computing ROA for Sanchez Software is:

4.Refer to the information for Sanchez Software's asset turnover is:

5.Refer to the information for Sanchez Software's accounts receivable turnover is (assume that Sanchez Software makes all sales on account):

6.Refer to the information for Sanchez Software. Sanchez Software's basic earnings per share is: