31) Which financial statement(s) do you need to calculate the profit margin ratio?
A) only the income statement
B) only the balance sheet
C) both the income statement and the balance sheet
D) both the statement of cash flows and the income statement
32) Which financial statement(s) do you need to calculate the return on assets?
A) only the income statement
B) only the balance sheet
C) both the income statement and the balance sheet
D) both the statement of cash flows and the income statement
33) Which financial statement(s) do you need to calculate the asset turnover ratio?
A) only the income statement
B) only the balance sheet
C) both the income statement and the balance sheet
D) both the statement of cash flows and the income statement
34) Which financial statement(s) do you need to calculate return on equity?
A) only the income statement
B) only the balance sheet
C) both the income statement and the balance sheet
D) the income statement, the balance sheet, and the statement of cash flows
35) Which financial statement(s) do you need to calculate the gross profit ratio?
A) only the income statement
B) only the balance sheet
C) both the income statement and the balance sheet
D) both the statement of cash flows and the income statement
The following information is from Megabux, Inc.'s annual report for the years ended December 31:
2012 2011 2010
Sales$120,000$110,000$100,000
Cost of goods sold58,00052,00046,000
Operating expenses48,00044,00042,000
Interest expense12,0009,0006,000
Net income$ 2,000$ 5,000$ 6,000
36) Refer to the Megabux annual report above. This information is from Megabux Inc.'s ________.
A) income statement
B) balance sheet
C) statement of cash flows
D) statement of changes in shareholders' equity
37) Refer to the Megabux annual report above. Calculate the gross profit ratio for
2010.
A) 46%
B) 42%
C) 54%
D) 6%
38) Refer to the Megabux annual report above. Calculate the gross profit ratio for
2011.
A) 58.0%
B) 52.7%
C) 47.3%
D) 4.5%
39) Refer to the Megabux annual report above. Calculate the gross profit ratio for
2012.
A) 1.7%
B) 48.3%
C) 62.0%
D) 51.7%
40) Refer to the Megabux annual report above. Which of the following explains the change in the gross profit ratio over the three-year period?
A) Foreign competition has made it difficult to sell as many products as Megabux sold in the past.
B) Megabux has raised its selling price per unit.
C) Suppliers may have raised the prices that Megabux must pay for the goods that it sells, but Megabux has not passed the higher costs on to its customers with higher selling prices.
D) This is a trick question. The gross profit ratio has not changed over the three-year period.