2. Calculate the following profitability ratios for 2024 and 2025: (Round your answers to 1 decimal place.) Gross profit ratio Return on assets Profit margin Asset turnover 2024 2025 % % % % % % times times
2. Calculate the following profitability ratios for 2024 and 2025: (Round your answers to 1 decimal place.) Gross profit ratio Return on assets Profit margin Asset turnover 2024 2025 % % % % % % times times
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Income statement and
| THE ATHLETIC ATTIC | ||
| Income Statements | ||
| For the Years Ended December 31 | ||
| 2025 | 2024 | |
|---|---|---|
| Net sales | $ 10,680,000 | $ 9,100,000 |
| Cost of goods sold | 6,980,000 | 5,600,000 |
| Gross profit | 3,700,000 | 3,500,000 |
| Expenses: | ||
| Operating expenses | 1,620,000 | 1,570,000 |
| 200,000 | 200,000 | |
| Interest expense | 42,000 | 42,000 |
| Income tax expense | 424,000 | 370,000 |
| Total expenses | 2,286,000 | 2,182,000 |
| Net income | $ 1,414,000 | $ 1,318,000 |
| THE ATHLETIC ATTIC | |||
| Balance Sheets | |||
| December 31 | |||
| 2025 | 2024 | 2023 | |
|---|---|---|---|
| Assets | |||
| Current assets: | |||
| Cash | $ 227,000 | $ 156,000 | $ 208,000 |
| 992,000 | 742,000 | 762,000 | |
| Inventory | 1,727,000 | 1,357,000 | 1,027,000 |
| Supplies | 132,000 | 102,000 | 77,000 |
| Long-term assets: | |||
| Equipment | 1,180,000 | 1,180,000 | 1,180,000 |
| Less: |
(620,000) | (420,000) | (220,000) |
| Total assets | $ 3,638,000 | $ 3,117,000 | $ 3,034,000 |
| Liabilities and |
|||
| Current liabilities: | |||
| Accounts payable | $ 180,800 | $ 111,000 | $ 88,800 |
| Interest payable | 4,200 | 0 | 4,200 |
| Income tax payable | 42,000 | 37,000 | 32,000 |
| Long-term liabilities: | |||
| Notes payable | 520,000 | 520,000 | 520,000 |
| Stockholders' equity: | |||
| Common stock | 620,000 | 620,000 | 620,000 |
| 2,271,000 | 1,829,000 | 1,769,000 | |
| Total liabilities and stockholders’ equity | $ 3,638,000 | $ 3,117,000 | $ 3,034,000 |
2. Calculate the following profitability ratios for 2024 and 2025: (Round your answers to 1 decimal place.)
Transcribed Image Text:2. Calculate the following profitability ratios for 2024 and 2025: (Round your answers to 1 decimal place.)
Gross profit ratio
Return on assets
Profit margin
Asset turnover
2024
2025
%
%
%
%
%
%
times
times
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