The following are extracted from the financial statements of Shawn Co., for 2019, 2018, and 2017. 2019 2018 2017 Net sales $233,000 (124,000) (95,000) $204,000 Cost of sales (110,000) (81,500) Selling...


The following are extracted from the financial statements of Shawn Co., for 2019, 2018, and<br>2017.<br>2019<br>2018<br>2017<br>Net sales<br>$233,000<br>(124,000)<br>(95,000)<br>$204,000<br>Cost of sales<br>(110,000)<br>(81,500)<br>Selling and administrative expenses<br>Other income:<br>Interest<br>Other<br>(3,700)<br>(3,050)<br>1,175<br>$ 10,625<br>100<br>Earnings before tax and extraordinary credit<br>Provision for income tax<br>$ 10,400<br>(4,800)<br>5,600<br>(4,740)<br>Earnings before extraordinary credit<br>Extraordinary credit<br>5,885<br>1,510<br>$ 7,395<br>$ 5,600<br>Total assets<br>$202,000<br>$173,000<br>17,400<br>116,800<br>4,000<br>280<br>$161,000<br>Long-term debt<br>Common equity<br>24,600<br>123,000<br>15,200<br>112,800<br>4,000<br>280<br>Preferred stock<br>4,000<br>Preferred dividends<br>280<br>Required:<br>Compute the following ratios for Shawn Co. for 2019 and 2018.<br>1. Return on total equity<br>Return on common equity<br>Gross profit margin<br>2.<br>3.<br>b. Discuss the trend in profitability and identify specific causes for the trend.<br>

Extracted text: The following are extracted from the financial statements of Shawn Co., for 2019, 2018, and 2017. 2019 2018 2017 Net sales $233,000 (124,000) (95,000) $204,000 Cost of sales (110,000) (81,500) Selling and administrative expenses Other income: Interest Other (3,700) (3,050) 1,175 $ 10,625 100 Earnings before tax and extraordinary credit Provision for income tax $ 10,400 (4,800) 5,600 (4,740) Earnings before extraordinary credit Extraordinary credit 5,885 1,510 $ 7,395 $ 5,600 Total assets $202,000 $173,000 17,400 116,800 4,000 280 $161,000 Long-term debt Common equity 24,600 123,000 15,200 112,800 4,000 280 Preferred stock 4,000 Preferred dividends 280 Required: Compute the following ratios for Shawn Co. for 2019 and 2018. 1. Return on total equity Return on common equity Gross profit margin 2. 3. b. Discuss the trend in profitability and identify specific causes for the trend.

Jun 02, 2022
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