What is the firms profit margin

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Reference no: EM131901853

Assignment

1. CVS Stores Inc. has assets of $5,960,000 and turns over its assets 1.9 times per year. Return on assets is 8 percent. What is the firm's profit margin (return on sales)?

2. Diagnostics Corporation of America income statement for 2015 is presented below:

Sales....................................................................................... $2,790,000

Cost of goods sold................................................................. 1,790,000

Gross profit........................................................................... 1,000,000

Selling and administrative expense......................................... 302,000

Operating profit..................................................................... 698,000

Interest expense..................................................................... 54,800

Income before taxes............................................................... 643,200

Taxes (30%)........................................................................... 192,960

Income after taxes.................................................................. $ 450,240

Compute the profit margin for 2015.

3. Orlando Imaging Center Corporation has total assets of $1,500,000 and current assets of $612,000. It turns over its fixed assets three times a year. It has $319,000 of debt. Its return on sales is 8 percent. What is its return on stockholders' equity?

4. The balance sheet for Medical Equipment Inc., is shown next. Sales for the year were $2,400,000, with 90 percent of sales sold on credit.

Medical Equipment Inc.
Balance Sheet 200X
Assets		Liabilities and Equity
Cash........................	$ 60,000	Accounts payable.................	$ 220,000
Accounts receivable......	240,000	Accrued taxes.....................	30,000
Inventory..................	350,000	Bonds payable (long-term)........................	150,000
Plant and equipment......	410,000	Common stock....................	80,000
		Paid-in capital.....................	200,000
		Retained earnings.................	380,000
Total assets............	$1,060,000	Total liabilities and equity...	$1,060,000

Compute the following ratios:

Current ratio.

Quick ratio.

Debt-to-total-assets ratio.

Asset turnover.

Average collection period.

5. A firm has net income before interest and taxes of $193,000 and interest expense of $28,100.

What is the times-interest-earned ratio?

Reference no: EM131901853

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