1. Gross Margin Percentage = Gross Margin / Sales *100
= 1000000 / 2250000 * 100
= 44.44 %
2. Net Profit Margin Percentage = Net Income / Sales * 100
= 236950 / 2250000 * 100
= 10.53 %
3. Return on Total Assets = EBIT / Net Operating Income / Average Total Assets * 100
Average Total Assets = Opening Assets + Closing Assets / 2
= 1100000 + 1452000 / 2
= 1276000
Return on Total Assets = EBIT / Net Operating Income / Average Total Assets * 100
= 370000 /1276000
= 28.99 % or 29 %
4. Return on Equity = Net Income / Average Stockholders Equity
Average Stockholders Equity = Opening Stockholders Equity + Closing Stockholders Equity / 2
= 725000 + 872000 /2
= 798500
Return on Equity = Net Income / Average Stockholders Equity * 100
= 236950 / 798500 * 100
= 29.67 %
5. Degree of financial leverage = EBIT or Net Operating Income / EBIT or Net Operating Income - Interest
= 370000 / 370000 - 31500
= 370000 / 338500
= 1.09
Financial Leverage = Total Debt / Total Equity
= 350000 / 872000
= 0.40
Therefore the Financial leverage is positive for the year.
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December...
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses S 21,000 220,000 300,000 11,000 Total current assets Property and equipment, net 552,000 900,000 Total assets $1,452,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 9 % $230,000 350,000 Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings 580,000 $110,000 762,000 Total stockholders' equity 872,000 Total liabilities and stockholders'...
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses $ 24,000 170,000 360,000 8,000 Total current assets Property and equipment, net 562,000 810,000 Total assets $1,372,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 9% $ 250,000 320,000 570,000 Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings $ 120,000 682,000 Total stockholders' equity 802,000 Total liabilities and...
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 21,000 Accounts receivable, net 170,000 Merchandise inventory 390,000 Prepaid expenses 9,000 Total current assets 590,000 Property and equipment, net 840,000 Total assets $ 1,430,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 230,000 Bonds payable, 12% 300,000 Total liabilities 530,000 Stockholders’ equity: Common stock, $5 par value $ 160,000 Retained earnings 740,000 Total stockholders’ equity 900,000 Total liabilities...
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 11% Total liabilities Stockholders' equity: Common stock, $5 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 21,000 260,000 350,000 10,000 641,000 890,000 $1,531,000 $ 290,000 330,000 620,000 $ 180,000 731,000...
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses $ 21,000 260,000 350,000 8,000 Total current assets Property and equipment, net 639,000 890,000 $1,529,000 Total assets Liabilities and Stockholders' Equity Liabilities $ 230,000 Current liabilities Bonds payable, 12% 320,000 550,000 $ 200,000 Total liabilities Stockholders' equity: Common stock, $5 par value Retained earnings 779,000 979,000 $1,529,000 Total stockholders' equity Total liabilities...
The financial statements for Castile Products, Inc., are given below Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 21,000 260,000 360,000 8,000 Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets 649,000 820,000 Property and equipment, net Total assets $1,469,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $300,000 350,000 Bonds payable, 11% Total liabilities Stockholders' equity: Common stock, $5 par value Retained earnings 650,000 $110,000 709,000 Total stockholders' equity 819,000 Total liabilities and equity $1,469,000...
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net $ Accounts 23,000 190,000 400,000 8,000 621,000 890,000 890,000 Total assets $1,511,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 12% $ 210,000 370,000 Total liabilities Stockholders' equity Common stock, $5 par value Retained earnings 580,000 $ 130,000 801,000 Total stockholders' equity Total liabilities...
Exercise 14-9 Financial Ratios for Assessing Profitability and Managing Debt [LO14-4, LO14-5] The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 6,500 Accounts receivable, net 35,000 Merchandise inventory 70,000 Prepaid expenses 3,500 Total current assets 115,000 Property and equipment, net 185,000 Total assets $ 300,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 50,000 Bonds payable, 10% 80,000 Total liabilities 130,000 Stockholders’ equity: Common stock, $5 per...
Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 20,000 Accounts receivable, net 160,000 Merchandise inventory 380,000 Prepaid expenses 11,000 Total current assets 571,000 Property and equipment, net 870,000 Total assets $1,441,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 210,000 Bonds payable, 9 300,000 Total liabilities 510,000 Stockholders' equity Common stock, $5 per value $ 180,000 Retained earnings 751,000 Total stockholders' equity 931,000 Total liabilities and stockholders' equity $1,441,000 Castile Products, Inc. Income Statement For the...
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses $ 23,000 180,000 330,000 11,000 Total current assets Property and equipment, net 544,000 830,000 Total assets $1,374,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 8% $ 260,000 340,000 600,000 Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings $ 180,000 594,000 Total stockholders' equity 774,000 Total liabilities and...