Chat with AIExam 16: Financial Statement Analysis
Marovich Corporation has provided the following financial data:
Dividends on common stock during Year 2 totaled $4,000. The market price of common stock at the end of Year 2 was $6.41 per share.Required:a. What is the company's net profit margin percentage for Year 2?b. What is the company's gross margin percentage for Year 2?c. What is the company's return on total assets for Year 2?d. What is the company's return on equity for Year 2?e. What is the company's earnings per share for Year 2?f. What is the company's price-earnings ratio for Year 2?g. What is the company's dividend payout ratio for Year 2?h. What is the company's dividend yield ratio for Year 2?i. What is the company's book value per share at the end of Year 2?
Dividends on common stock during Year 2 totaled $4,000. The market price of common stock at the end of Year 2 was $6.41 per share.Required:a. What is the company's net profit margin percentage for Year 2?b. What is the company's gross margin percentage for Year 2?c. What is the company's return on total assets for Year 2?d. What is the company's return on equity for Year 2?e. What is the company's earnings per share for Year 2?f. What is the company's price-earnings ratio for Year 2?g. What is the company's dividend payout ratio for Year 2?h. What is the company's dividend yield ratio for Year 2?i. What is the company's book value per share at the end of Year 2?
(91) 
Verifieda.Net profit margin percentage = Net income ÷ Sales= $36,000 ÷ $1,230,000 = 2.9% (rounded)b.Gross margin percentage = Gross margin ÷ Sales= $420,000 ÷ $1,230,000 = 34.1% (rounded)c.Return on total assets = Adjusted net income* ÷ Average total assets**= $41,850 ÷ $1,316,000 = 3.18% (rounded)*Adjusted net income = Net income + [Interest expense × (1 − Tax rate)]= $36,000 + [$9,000 × (1 − 0.35)] = $41,850**Average total assets = ($1,332,000 + $1,300,000) ÷ 2 = $1,316,000d.Return on equity = Net income ÷ Average stockholders' equity*= $36,000 ÷ $1,026,000 = 3.51% (rounded)*Average stockholders' equity = ($1,042,000 + $1,010,000) ÷ 2 = $1,026,000e.Earnings per share = Net Income ÷ Average number of common shares outstanding*= $36,000 ÷ 50,000 shares = $0.72 per share (rounded)*Number of common shares outstanding = Common stock ÷ Par value= $200,000 ÷ $4 per share = 50,000 sharesf.Price-earnings ratio = Market price per share ÷ Earnings per share= $6.41 ÷ $0.72 = 8.90 (rounded)g.Dividend payout ratio = Dividends per share* ÷ Earnings per share= $0.08 ÷ $0.72 = 11.1% (rounded)*Dividends per share = Common dividends ÷ Common shares (see above)= $4,000 ÷ 50,000 shares = $0.08 per share (rounded)h.Dividend yield ratio = Dividends per share* ÷ Market price per share= $0.08 ÷ $6.41 = 1.25% (rounded)*Dividends per share = Common dividends ÷ Common shares (see above)= $4,000 ÷ 50,000 shares = $0.08 per share (rounded)i.Book value per share = Common stockholders' equity ÷ Number of common shares outstanding*= $1,042,000 ÷ 50,000 shares = $20.84 per share (rounded)*Number of common shares outstanding = Common stock ÷ Par value= $200,000 ÷ $4 per share = 50,000 shares
Perrett Corporation has provided the following financial data:
Required:a. What is the company's net profit margin percentage for Year 2?b. What is the company's gross margin percentage for Year 2?c. What is the company's return on total assets for Year 2?d. What is the company's return on equity for Year 2?
Required:a. What is the company's net profit margin percentage for Year 2?b. What is the company's gross margin percentage for Year 2?c. What is the company's return on total assets for Year 2?d. What is the company's return on equity for Year 2? (91) Verifieda.Net profit margin percentage = Net income ÷ Sales= $39,500 ÷ $1,200,000 = 3.3% (rounded)b.Gross margin percentage = Gross margin ÷ Sales= $430,000 ÷ $1,200,000 = 35.8% (rounded)c.Return on total assets = Adjusted net income* ÷ Average total assets**= $53,800 ÷ $1,460,000 = 3.68% (rounded)*Adjusted net income = Net income + [Interest expense × (1 − Tax rate)]= $39,500 + [$22,000 × (1 − 0.35)] = $53,800**Average total assets = ($1,470,000 + $1,450,000) ÷ 2 = $1,460,000d.Return on equity = Net income ÷ Average stockholders' equity*= $39,500 ÷ $937,000 = 4.22% (rounded)*Average stockholders' equity = ($954,000 + $920,000) ÷ 2 = $937,000
Mayfield Corporation has provided the following financial data: 
The company's acid-test (quick) ratio is closest to:
The company's acid-test (quick) ratio is closest to: (76) VerifiedD
Gnas Corporation's total current assets are $252,000, its noncurrent assets are $632,000, its total current liabilities are $188,000, its long-term liabilities are $518,000, and its stockholders' equity is $178,000. The current ratio is closest to:
(76) Acquiring land by taking out a long-term mortgage will not affect the current ratio.
(74) Deacon Corporation has provided the following financial data from its balance sheet and income statement: 
The company's times interest earned ratio for Year 2 is closest to:
The company's times interest earned ratio for Year 2 is closest to: (76) Ribaudo Corporation has provided the following financial data from its balance sheet and income statement: 
The company's total asset turnover for Year 2 is closest to:
The company's total asset turnover for Year 2 is closest to: (69) Norton Incorporated could improve its current ratio of 2 by:
(80) Groeneweg Corporation has provided the following data: 
Dividends on common stock during Year 2 totaled $4,500. The market price of common stock at the end of Year 2 was $9.45 per share. The company's dividend payout ratio for Year 2 is closest to: (Round your intermediate calculations to 2 decimal places.)
Dividends on common stock during Year 2 totaled $4,500. The market price of common stock at the end of Year 2 was $9.45 per share. The company's dividend payout ratio for Year 2 is closest to: (Round your intermediate calculations to 2 decimal places.) (70) Windham Corporation has current assets of $660,000 and current liabilities of $825,000. Windham Corporation's current ratio would be increased by:
(78) To increase total asset turnover, management must either increase sales or reduce total stockholders' equity.
(77) Jepson Corporation's most recent income statement appears below:
Required:Compute the gross margin percentage.
Required:Compute the gross margin percentage. (85) Issuing common stock will decrease a company's financial leverage.
(72) Earnings per share is computed by multiplying net income by the average number of common shares outstanding.
(78) Last year Javer Corporation had net income of $200,000, income tax expense of $74,000, and interest expense of $20,000. The corporation's times interest earned was closest to:
(63) Freiman Corporation's most recent balance sheet and income statement appear below: 
The working capital at the end of Year 2 is:
The working capital at the end of Year 2 is: (66) Last year Truro Corporation purchased $800,000 of inventory. The cost of goods sold was $750,000 and the ending inventory was $125,000. The inventory turnover for the year was:
(75) Windham Corporation has current assets of $400,000 and current liabilities of $500,000. Windham Corporation's current ratio would be increased by:
(80) Liquidity refers to how quickly an asset can be converted into cash.
(90) Fayer Corporation has provided the following financial data: 
Dividends on common stock during Year 2 totaled $4,500. The market price of common stock at the end of Year 2 was $10.88 per share.The company's debt-to-equity ratio at the end of Year 2 is closest to:
Dividends on common stock during Year 2 totaled $4,500. The market price of common stock at the end of Year 2 was $10.88 per share.The company's debt-to-equity ratio at the end of Year 2 is closest to: (65) 
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