Check m 4 The financial statements for Castile Products, Inc., are given below t
ID: 2534305 • Letter: C
Question
Check m 4 The financial statements for Castile Products, Inc., are given below ts, Inc Balance Sheet 0.5 points Current assets: $ 22,800 170,800 360.000 Accounts receivable, net Merchandise inventory eBook Prepaid expenses Total current assets Property and equipment, net Total assets 561,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 11% Total liabilities Stockholders' equity: Common stock, $5 par value Retained earnings $ 180,800 631,800 Total stockholders' equity Total liabilities and stockholders equity $1,411,800 Castile Products, Inc Income Statement For the Year Ended December 31 Sales Cost of goods sold Gross margin Selling and administrative expenses iet operating income Interest expense 52,140,0ee 970,000 630 340,00e 40,700 299,300 89.790 Income taxes (38%)Explanation / Answer
Answer
1.
Gross Margin Percentage = (Gross Margin / Total Sales) * 100
= ($970,000 / 2,140,000) * 100
= 45.327%
Gross Margin Percentage = 45.33%
2.
Net profit Margin Ratio = (Net Income / Total Sales) * 100
= ($209,510 / 2,140,000) * 100
Net profit Margin Ratio = 9.79%
3.
Return on Total Assets = (Income before Interest and Tax / Average Total Assets) * 100
= ($340,000 / 1,411,000) * 100
= 24.096%
Return on Total Assets = 24.1%
4.
Return on Equity = (Net Income / Average Shareholder’s Equity) * 100
= ($209,510 / 811,000) * 100
= 25.833%
Return on Equity = 25.83%
5.
Financial Leverage = Income before Interest and Tax / Income before tax
= $340,000 / 299,300
= 1.1359
Financial Leverage = 1.14
Note
Dear Student, I rounded off my answer but as u can see after each ratio u will find answer upto 3 to 4 decimal.