Compute the Asset turnover ratios for Pine Corp

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Reference no: EM133170035

Question - Return Ratios and Leverage - The following selected data are taken from the financial statements of Pine Corp.:

Sales revenue

$663,000

Cost of goods sold

389,000

Gross profit

$274,000

Selling and administrative expense

100,000

Operating income

$174,000

Interest expense

50,000

Income before tax

$124,000

Income tax expense (40%)

49,600

Net income

$74,400

Accounts payable

$45,000

Accrued liabilities

70,000

Income taxes payable

10,000

Interest payable

25,000

Short-term loans payable

150,000

Total current liabilities

$300,000

Long-term bonds payable

$500,000

Preferred stock, 10%, $100 par

$250,000

Common stock, no par

600,000

Retained earnings

350,000

Total stockholders' equity

$1,200,000

Total liabilities and stockholders' equity

$2,000,000

Required - Compute the following ratios for Pine Corp.:

1. Return on sales

2. Asset turnover (Assume that total assets at the beginning of the year were $1,600,000.)

3. Return on assets

4. Return on common stockholders' equity (Assume that the only changes in stockholders' equity during the year were from the net income for the year and dividends on the preferred stock.)

Reference no: EM133170035

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