For both the Current Year and 1 Year Ago, compute the following ratios:
(1-a) Compute profit margin ratio for the current year and one year ago.
(1-b) Did profit margin improve or worsen in the Current Year versus 1 Year Ago?
Complete this question by entering your answers in the tabs below.
Required 1A
Required 1B
Compute profit margin ratio for the current year and one year ago.
Profit Margin Ratio
Numerator:
At December 31 Assets Cash Accounts receivable net Merchandise inventory Prepaid expenses Plant assets net Total assets Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity
Current Year Year Ago 2 Years Ago
$32,000 86,900 111,000 10,350 277,000 $517,250
$35,250 61,500 80,000 9,200 250,000 $435,950
$37,200 49,000 54,000 4,900 229,000 $374,100
$128,400 96,000 163,000 129,850 $517,250
$72,500 100,750 163,000 99,700 $435,950
$50,800 80,800 163,000 80,5164 $374,100
The company's income statements for the Current Year and Year Ago follow
For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income tax expense Total costs and expenses Net income
Current Year 725,000 $420,500 232,000 11,700 9,550 673,750 $51,250 $3.14
1 Year Ago $630,000 $403,200 144,900 13,400 8,600 570,100 60,065 $
Earnings per share
$3.67
For both the Current Year and 1 Year Ago, compute the following ratios:
(1-a) Compute profit margin ratio for the current year and one year ago.
(1-b) Did profit margin improve or worsen in the Current Year versus 1 Year Ago?
Complete this question by entering your answers in the tabs below.
Required 1A
Required 1B
Profit Margin Ratio Denominator:
Numerator:
Profit Margin Ratio
