McDougal Printing Inc., had sales totaling $40,000,000 in fiscal year 2012. Some

Question

McDougal Printing Inc., had sales totaling $40,000,000 in fiscal year 2012. Some ratios for the company are listed below. Use this information to determine the dollar values of various income statement and balance sheet accounts. Sales: $40,000,000 gross profit margin 80% operating profit 35% net profit 8% return on total sales 16% return on common equity 20% total asset turnover 2 average collection period 62.2 day Calculate: A. Gross profits B. cost of goods sold C. operating profits D. operating expenses E. earnings available for common stockholders F. total assets G: total common stock equity H: accounts receivable

Explanation / Answer

A. Gross Profit margin= Gross profit/Net sales .8= Gross Profit/40,000,000 Gross profit= $32000000 B. (Sales - Cost of Goods Sold) / Sales = Gross Profit Margin (40,000,000 - Cost of Goods Sold) / 40,000,000 = 80% Cost of Goods Sold = $8,000,000 C.Operating profit margin= Operating profit/Net sales .35= Operating profit/40,000,000 Operating profit= 14000000

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