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Compute the following ratio analysis: Return on Equity Return on Assets Gross Profit Margin Write your interpretation after the computation.

Compute the following ratio analysis: Return on Equity Return on Assets Gross Profit Margin Write your interpretation after the computation.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Compute the following ratio analysis:

Return on Equity

Return on Assets

Gross Profit Margin

Write your interpretation after the computation.

BARRY'S SUPERSTORE BARRY'S SUPERSTORE Comparative Year-End Income Statements Comparative Year-End Balance Sheets Prior Year Current Year Prior Year Current Year Net Sales $100,000 $120,000 Assets: Cost of Goods Sold 50,000 60,000 Cash $90,000 $110,000 Gross Profit 50,000 60,000 Accounts Receivable 20,000 30,000 Inventory 35,000 40,000 Rent Expense 5,000 5,500 Short-Term Investments 15,000 20,000 Total Current Asstes 200,000 Depreciation Expense Salaries Expense 2,500 3,600 160,000 3,000 5,400 Equipment 40,000 50,000 Utility Expense 1,500 2,500 Total Assets $200,000 $250,000 Operating Income 38,000 43,000 Liabilities: Accounts Payable $ 60,000 $ 75,000 Interest Expense 3,000 2,000 Unearned Revenue 10,000 25,000 Income Tax Expense 5,000 6,000 Total Current Liabilities 70,000 100,000 Net Income $ 30,000 $ 35,000 Notes Payable 40,000 50,000 Total Liabilities 110,000 150,000 Stockholder Equity Common Stock 75,000 80,000 Ending Retained Earnings Total Stockholder Equity 15,000 20,000 90,000 100,000 Total Liabilities and Stockholder Equity $200,000 $250,000
Transcribed Image Text:BARRY'S SUPERSTORE BARRY'S SUPERSTORE Comparative Year-End Income Statements Comparative Year-End Balance Sheets Prior Year Current Year Prior Year Current Year Net Sales $100,000 $120,000 Assets: Cost of Goods Sold 50,000 60,000 Cash $90,000 $110,000 Gross Profit 50,000 60,000 Accounts Receivable 20,000 30,000 Inventory 35,000 40,000 Rent Expense 5,000 5,500 Short-Term Investments 15,000 20,000 Total Current Asstes 200,000 Depreciation Expense Salaries Expense 2,500 3,600 160,000 3,000 5,400 Equipment 40,000 50,000 Utility Expense 1,500 2,500 Total Assets $200,000 $250,000 Operating Income 38,000 43,000 Liabilities: Accounts Payable $ 60,000 $ 75,000 Interest Expense 3,000 2,000 Unearned Revenue 10,000 25,000 Income Tax Expense 5,000 6,000 Total Current Liabilities 70,000 100,000 Net Income $ 30,000 $ 35,000 Notes Payable 40,000 50,000 Total Liabilities 110,000 150,000 Stockholder Equity Common Stock 75,000 80,000 Ending Retained Earnings Total Stockholder Equity 15,000 20,000 90,000 100,000 Total Liabilities and Stockholder Equity $200,000 $250,000
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