Columbia Associates declared and paid a cash dividend of $8,300 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information:
Current Year Previous Year
Income Statement
Sales Revenue
$ 195,000 $ 167,000
Cost of Goods Sold
86,000
82,000
Gross Profit
109,000
85,000
Operating Expenses
53,000
46,600
Interest Expense
5,700
5,700
Income before Income Tax Expense
50,300
32,700
Income Tax Expense (30%)
15.090
9,810
Net Income
$ 35,210
$ 22,890
Balance Sheet
Cash
$ 91,685
$ 21,000
Accounts Receivable, Net
34,000
29,000
Inventory
42,000
55,000
Property and Equipment, Net
112,000
122,000
Total Assets
$ 279,685
$ 227,000
Accounts Payable
$ 59,000
$ 33,300
Income Tax Payable
1,425
1,350
Total Liabilities
57,000
57,000
Notes Payable (long-term)
117,425
91,650
Common Stock (par $10)
100,200
100,200
Retained Earnings
62,060
35,150
Total Liabilities and Stockholders' Equity
$ 279,685
$ 227,000
Required:
1. Compute the gross profit percentage in the current and previous years. Are the current-year results better, or worse, than those for the previous year?
!. Compute the net profit margin for the current and previous years. Are the current-year results better, or worse, than those for the previous year?
1. Compute the earnings per share for the current and previous years. Are the current-year results better, or worse, than those for the previous year?
.. Stockholders' equity totaled $117,000 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year?
i. Net property and equipment totaled $127,000 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year?
i. Compute the debt-to-assets ratios for the
