The comparative financial statements prepared at December 31, 2015, for Prince C
ID: 2484178 • Letter: T
Question
The comparative financial statements prepared at December 31, 2015, for Prince Company showed the following summarized data:
Respond to the following for 2015: (Round your answers to 1 decimal place.)
a. What was the gross profit percentage?
b. What was the income tax rate?
c. Compute the profit margin?
d. What percentage of total resources was invested in operational assets?
e. Compute the debt-to-equity ratio?
f. What was the return on equity?
g. What was the return on assets?
h. Compute the financial leverage percentage?
The comparative financial statements prepared at December 31, 2015, for Prince Company showed the following summarized data:
Explanation / Answer
Solution:
a) Gross Profit Percentage = Gross Profit / Sales x 100 = $78,000 / $190,000 x 100 = 41.1%
b) Income Tax Rate = Income Tax / Pretax Income x 100 = $8,000 / 22,000 X 100 = 36.4%
c) Profit Margin = Net Income / Sales x 100 = $14,000 / $190,000 x 100 = 7.4%
d) percentage of total resources was invested in operational assets = Operational Assets / Total Resources x 100 = $45,000 / $103,000 x 100 = 43.7%
PLease ask separate question for balance part...