The 2021 income statement of Adrian Express reports sales of $20,110,000, cost of goods sold of...
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The 2021 income statement of Adrian Express reports sales of $20,110,000, cost of goods sold of $12,450,000, and net income of $1,860,000. Balance sheet information is provided in the following table. Assets Current assets: Cash ADRIAN EXPRESS Balance Sheets December 31, 2021 and 2020 Accounts receivable Inventory Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity Gross profit ratio Return on assets Profit margin Asset turnover Return on equity 2021 45% 25% 15% 5.5 times 35% Industry averages for the following profitability ratios are as follows: 2020 $ 780,000 1,700,000 $ 900,000 1,160,000 2,140,000 1,600,000 4,980,000 4,380,000 $9,600,000 $8,040,000 $2,008,000 $1,808,000 2,472,000 2,548,000 2,000,000 1,960,000 3,120,000 1,724,000 $8,040,000 $9,600,000 Required: 1. Calculate the five profitability ratios listed above for Adrian Express. (Round your answers to 1 decimal place.) Profitability Ratios Gross profit ratio Return on assets Profit margin Asset turnover Return on equity % % % times % 2. Do you think the company is more profitable or less profitable than the industry average? O More profitable O Less profitable The 2021 income statement of Adrian Express reports sales of $20,110,000, cost of goods sold of $12,450,000, and net income of $1,860,000. Balance sheet information is provided in the following table. Assets Current assets: Cash ADRIAN EXPRESS Balance Sheets December 31, 2021 and 2020 Accounts receivable Inventory Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity Gross profit ratio Return on assets Profit margin Asset turnover Return on equity 2021 45% 25% 15% 5.5 times 35% Industry averages for the following profitability ratios are as follows: 2020 $ 780,000 1,700,000 $ 900,000 1,160,000 2,140,000 1,600,000 4,980,000 4,380,000 $9,600,000 $8,040,000 $2,008,000 $1,808,000 2,472,000 2,548,000 2,000,000 1,960,000 3,120,000 1,724,000 $8,040,000 $9,600,000 Required: 1. Calculate the five profitability ratios listed above for Adrian Express. (Round your answers to 1 decimal place.) Profitability Ratios Gross profit ratio Return on assets Profit margin Asset turnover Return on equity % % % times % 2. Do you think the company is more profitable or less profitable than the industry average? O More profitable O Less profitable
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Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
Posted Date:
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