Question

USE THE DATA IN THE TABLE BELOW TO ANSWER QUESTIONS 19-24 (Assume all account figures are in dollars) 2015 2014 440 1,810 380 2,040 120 95 Accounts payable Accounts receivable, net Accruals Cash Common stock Cost of goods sold Depreciation expense Interest expense Inventory (end of year) Long-term debt Net fixed assets Net sales Notes payable Operating expenses (excluding depreciation) Retained earnings Taxes 120 2,120 6,610 1,560 140 5,720 3,890 7,530 10,750 800 1,680 7,835 260 2,380 6,420 1,630 170 5,530 4,150 8,050 11,650 740 1,780 7,940 380 This company's gross profit margin (as a percent rounded to I decimal place) in 2014 was 44 1 . Assume that this is a retail company. If the company purchased products that it sold in 2015 for $5.00 per how many units did the company purchase in 2015? 2330 . ROE for 2015 is _ %. 69.33 - Cash flow from operating activities in 2015 is $ 5 . Cash flow from investing activities in 2015 is $_-520. - Cash flow from financing activities in 2015 is $_460

Answer 1

19) Gross Profit Margin = (Gross Profit / Net Sales) x 100 Net Sales (2014) Less: Cost of Goods Sold Gross Profit (2014) $10,750 $6,610 $4,140 ($10750 - $6610) Gross Profit Margin 2014 38.5% ($4140 / $10750) x 100] 20) Units purchased = Cost of Goods Sold / Cost per unit purchased $6,420 Cost of Goods Sold (2015 Cost per unit purchase Units purchased in 2015 $5 1,284 ($6420 / $5)

21) Return on Equity (ROE) = (Operating Income / Average Stockholders' Equity) x 100 $11,650 Workings: Net Sales (2015) Less: Cost of Goods Sold Depreciation Expense Operating Expenses Operating Income (2015) Avg. Stockholders Equity ROE of 2015 $6,420 $1,630 $1,780 [Excluding dep. Exp.] $1,820 $10,138 [Ref: Workings] 18.0% ($1820 / $10138) x 100) Common Stock Retained Earnings Stockholders' Equity 2014 $2,120 $7,835 $9,955 2015 $2,380 $7,940 $10,320 Avg. Stockholders' Equity $10,138 ($9955 + $10320)/2 22) Cash flow from operating activities = Net Sales - Cost of Goods Sold - Op. Expenses (excl. dep. exp.) - Taxes $11,650 Net Sales (2015) Less: Cost of Goods Sold Operating Expenses Taxes Cash flow from operating activities (2015) $6,420 $1,780 [Excluding dep. Exp.] $380 $3,070