Shown below is a recent income statement for B-D Electric.

B-D ELECTRIC
Income Statement
For the Year Ended January 31, Year 2
Net sales		$ 7,500,000
Less: Cost of goods sold		4,100,000
Gross profit		$ 3,400,000
Less: Operating expenses		1,975,000
Operating income		$ 1,425,000
Less: Non-operating expenses:
Interest expense	$ 175,000
Income taxes expense	280,000	455,000
Net Income		$ 970,00

Assume that comparative statements of financial position (balance sheets) for B-D Electric indicate average total assets for the year of $2,500,000, and average total equity of $2,050,000.

Required: Compute the following: (Round each to one decimal point.)

(a) Gross profit rate.	________%
(b) Net income as a percentage of net sales.	________%
(c) Return on assets.	________%
(d) Return on equity.	________%

Answer rating: 100% (QA)

To compute the required financial ratios for BD Electric based on the provided income statement and ... View the full answer