Ask Question
1 February, 05:02

Maggie's Skunk Removal Corp.'s 2018 income statement listed net sales of $14.5 million, gross profit of $9.90 million, EBIT of $7.6 million, net income available to common stockholders of $5.2 million, and common stock dividends of $3.2 million. The 2018 year-end balance sheet listed total assets of $54.5 million and common stockholders' equity of $23.0 million with 2.0 million shares outstanding. Calculate the following:

(a) Profit margin

(b) Gross profit margin

(c) Operating profit margin

(d) Basic earnings power

(e) Return on assets

+1
Answers (1)
  1. 1 February, 08:32
    0
    The computations are as follows

    a. Profit margin

    = Net Income available to common stockholders : Net Sales

    = $5.2 Million : $14.5 Million

    = 35.86%

    b. Gross profit margin

    = Gross Profit : Net Sales

    = $9.90 Million : $14.5 Million

    = 68.28%

    c. Operating profit margin

    = EBIT : Net Sales

    = $7.60 Million : $14.5 Million

    = 52.41%

    d. Basic earning power

    = EBIT : Total Assets

    = $7.6 Million : $54.5 Million

    = 13.94%

    e. Return on assets

    = Net Income available to common stockholders : Total Assets

    = $5.2 Million : $54.5 Million

    = 9.54%
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Maggie's Skunk Removal Corp.'s 2018 income statement listed net sales of $14.5 million, gross profit of $9.90 million, EBIT of $7.6 ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers