Question

Help Save & Ex Eignment i Che Tiger Audio declared and paid a cash dividend of $7,325 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: Current Previous $312,000 163,650 148,350 57,600 5,800 84,950 25,485 $ 59,465 $257,000 147,000 110,000 48,130 5,070 56,800 17,040 $ 39,760 Income Statement Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (308) Net Income Balance Sheet Cash Accounts Receivable, Net Inventory Property and Equipment, Net Total Assets Accounts Payable Income Tax Payable Note Payable (long-term) Total Liabilities Common Stock (par $1) Retained Earnings Total Liabilities and Stockholders' Equity $ 64,390 29.300 43.000 145,000 281,690 16,000 350 00 S50 .800 110.240 $281.690 $ 43,400 25,000 40.000 133,400 241,800 $ 34,000 3,700 110,200 147.900 35,800 58,100 $241,800 Required: 1. Compute the gross profit percentage in the current and previous years. Are the current year results better, or worse, than those fi the previous year? 2. Compute the net profit margin for the current and previous years. Are the current year results better, or worse than those for the

Answer 1

1-a.		Gross Profit Percentage
	Current Year ($148350/$312000)	47.5	%
	Previous Year ($110000/$257000)	42.8	%
1-b.	Better
2-a.		Net Profit Margin
	Current Year ($59465/$312000)	19.1	%
	Previous Year ($39760/$257000)	15.5	%
2-b.	Better
3-a.		Earnings per Share
	Current Year ($59465/$35800)	$                                      1.66
	Previous Year ($39760/$35800)	$                                      1.11
3-b.	Better
4-a.		Return on Equity
	Current Year ($59465/$119970)	49.6	%
	Previous Year ($39760/$88450)	45.0	%
4-b.	Better

Average stockholders' equity:

Current year: ($35800 + $58100 + $35800 + $110240)/2 = $119970

Previous year: ($83000 + $35800 + $58100)/2 = $88450

Per HOMEWORKLIB RULES, the first 4 parts have been answered. Please post the remaining separately. Thank you.