Question

Maggie's Skunk Removal Corp.'s 2021 income statement listed net sales of $13.5 million, gross profit of $9.10 million, EBIT of $6.6 million, net income available to common stockholders of $4.2 million, and common stock dividends of $2.2 million. The 2021 year- end balance sheet listed total assets of $53.5 million and common stockholders' equity of $22.0 million with 2.0 million shares outstanding. Calculate the gross profit margin. (Round your answer to 2 decimal places.) Gross profit margin % Calculate the operating profit margin. (Round your answer to 2 decimal places.) Operating profit margin % Calculate the profit margin. (Round your answer to 2 decimal places.) Profit margin 1 %

Answer 1

Given data for Maggie's Skunk Removal Corp's 2021

Net sales = $13.5 million

Gross Profit = 9.10 Million

EBIT = $6.6 million

NI = $4.2 million

Common stock dividend = $2.2 million

Total Assets = $53.5 million

equity = $22 million

Shares outstanding = 2 million

1). Gross Profit margin = Gross profit / sales = 9.1/13.5 = 67.41%

2). Operating profit margin = EBIT/Sales = 6.6/13.5 = 48.89%

3). Profit margin = NI/sales = 4.2/13.5 = 31.11%

4). Basic earning power = EBIT/Total assets = 6.6/53.5 = 12.34%

5). Return on assets = NI/Assets = 4.2/53.5 = 7.85%

6). Return on equity = NI/Equity = 4.2/22 = 19.09%

7). Dividend payout ratio = Dividend per share/earning per share or Total dividend/Net income = 2.2/4.2 = 52.38%