Ex. 198
Selected data for Nancy's Store appear below.
2011 2010
Net sales$800,000$520,000
Net income60,00035,000
Inventory at end of year65,00085,000
Accounts receivable at end of year90,00070,000
Instructions
Compute the following for 2011:
(a)Profit margin.
(b)Inventory turnover.
(c)Receivables turnover.
Ex. 199
Selected financial statement data for Holmes Company are presented below.
Net sales$1,000,000
Cost of goods sold700,000
Interest expense10,000
Net income144,000
Total assets (ending)850,000
Total common stockholders' equity (ending)650,000
Total assets at the beginning of the year were $750,000; total common stockholders' equity was $550,000 at the beginning of the period.
Instructions
Compute each of the following:
(a)Asset turnover
(b)Profit margin
(c)Return on assets
(d)Return on common stockholders' equity
Ex. 200
Winter Corporation has issued common stock only. The company has been successful and the gross profit is 20% of sales. The information shown below was taken from the company's financial statements.
Beginning inventory$ 482,000
Purchases4,836,000
Ending inventory?
Average accounts receivable800,000
Average common stockholders' equity3,500,000
Sales (all on credit)6,000,000
Net income420,000
Instructions
Compute the following:
(a)Receivables turnover and the average collection period.
(b)Inventory turnover and the days in inventory.
(c)Return on common stockholders' equity.