Answer:
1. Gross profit ratio= Gross Profit/ Sales *100
-Sales $ 20510,000
-Gross Profit = Sales - Cost of Goods Sold =20,510,000 - 12,550,000 = 7,960,000
Gross Profit Ratio= 7,960,000 / 20,510,000 * 100
= 38.81%
2.Return on Assets= Net income after tax / Average Total assets
Where Average Total assets= (9,800,000+8,160,000) / 2= 8,980,000
Where Net income after tax= 1,940,000
Return on Assets = 1,940,000 / 8,980,000 * 100 = 21.60%
3.Profit Margin= Net income/ Sales *100
=1,940,000 /20,510,000 *100
= 9.46%
4. Total Assets turnover= Sales / Average assets
=20,510,000 / 8,980,000
=2.28 times
5 Return on Equity: Net income after tax/ Average stockholder's equity
Where Average Stockholder's equity: (2,050,000 +3,190,000 + 1990000 + 1766000) / 2 = $4498,000
Return on Equity: 1940000/4498,000 *100
= 43.13%
