Answer:
Gross profit ratio % = 35.60%
Return on assets % = 10.45%
Profit margin % = 2.82%
Asset turnover times = 3.90 times
Return on equity % = 46.44%
Explanation:
a. Gross profit ratio %
Gross profit = Sales revenue - Cost of good sold = $14,820,000 - $9,544,080 = $5,275,920
Gross profit ratio % = (Gross profit / Sales revenue) * 100 = ($5,275,920 / $14,820,000) * 100 = 35.60%
b. Return on assets %
Return on assets % = (Net income / Total assets) * 100 = ($418,000/$4,000,000) * 100 = 10.45%
c. Profit margin %
Profit margin % = (Net income / Sale revenue) * 100 = ($418,000/$14,820,000) * 100 = 2.82%
d. Asset turnover times
Average total asset = ($4,000,000 + $3,600,000) / 2 = $3,800,000
Asset turnover times = Sales revenue / Average total asset = $14,820,000/$3,800,000 = 3.90 times
e. Return on equity %
Return on equity % = (Net income / Common stock) * 100 = ($418,000/$900,000) * 100 = 46.44%
