Question7of8

- / 8

View Policies

Current Attempt in Progress

Carla VistaMedical manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income statement for 2019 and 2020 follow.

Carla VistaMedical

Comparative Balance Sheet

As of December 3120202019AssetsCurrent assetsCash$395,000$417,400Accounts receivable, net1,054,000776,500Inventory728,000681,100Other current assets381,300247,100Total current assets2,558,3002,122,100Property, plant, & equipment, net8,661,9708,439,780Total assets$11,220,270$10,561,880Liabilities and Stockholders' EquityCurrent liabilities$3,160,000$2,846,000Long-term debt3,702,6003,892,700Total liabilities6,862,6006,738,700Preferred stock, $5 par value58,90058,900Common stock, $0.25 par value104,650103,850Retained earnings4,194,1203,660,430Total stockholders' equity4,357,6703,823,180Total liabilities and stockholders' equity$11,220,270$10,561,880

Carla VistaMedical

Comparative Income Statement and Statement of Retained Earnings

For the Year20202019Sales revenue (all on account)$10,177,300$9,613,900Cost of goods sold5,613,0005,298,700Gross profit4,564,3004,315,200Operating expenses2,840,2002,634,200Net operating income1,724,1001,681,000Interest expense300,400308,600Net income before taxes1,423,7001,372,400Income taxes (30%)427,110411,720Net income$996,590$960,680Dividends paidPreferred dividends29,55029,550Common dividends433,350413,000Total dividends paid462,900442,550Net income retained533,690518,130Retained earnings, beginning of year3,660,4303,142,300Retained earnings, end of year$4,194,120$3,660,430

Calculate the following profitability ratios for 2020.(Round answers to 1 decimal place, e.g. 50.1%.)

a.Gross margin percentage%b.Return on assets%c.Return on common stockholders' equity%