(a) Introduction: Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory. To calculate: The gross profit percentage for 2013 and 2012 and comment on the same.

Question

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Answer 1

Question

Chapter 13, Problem 4E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2013 and 2012 and comment on the same.

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To compute:

The net profit margin for 2012 and 2013 and state if the company was successful in controlling its operating expenses by comparing the data of both the years.

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2012 and 2013 and comment on the same.

To determine

(d)

Introduction:

Return on equity measure the profit earned using capital provided by the shareholders of a firm or in other words we can say that ROI measures the effectiveness with which a company uses the assets to create profits.

To calculate:

The return on equity for 2012 and 2013 and comment on the same.

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Students have asked these similar questions

A company has the following items for the fiscal year 2020: Revenue =10 million Cost of goods sold = 3 million EBITDA = 5 million EBIT = 4 million Net income = 2 million Calculate the company’s net profit margin Write the formula for the following ratios and what each ratio measures: Current Ratio Quick Ratio

b. By what percentage did the net income grow each year? For example, revenues (increased or decreased) in 2013 x 10.02% however, cost of goods sold (declined or increased) by 7.70%. *Use the Data Table*

The gross profit margin indicates how profitable sales have been. Q.1 Calculate the gross profit margin for Pearson & Litt for 2020.Q.2 Explain the results of the gross profit margin calculation.

Answer 2

Question

Chapter 13, Problem 4E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2013 and 2012 and comment on the same.

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To compute:

The net profit margin for 2012 and 2013 and state if the company was successful in controlling its operating expenses by comparing the data of both the years.

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2012 and 2013 and comment on the same.

To determine

(d)

Introduction:

Return on equity measure the profit earned using capital provided by the shareholders of a firm or in other words we can say that ROI measures the effectiveness with which a company uses the assets to create profits.

To calculate:

The return on equity for 2012 and 2013 and comment on the same.

Expert Solution & Answer

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Answer 3

Question

Chapter 13, Problem 4E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2013 and 2012 and comment on the same.

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To compute:

The net profit margin for 2012 and 2013 and state if the company was successful in controlling its operating expenses by comparing the data of both the years.

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2012 and 2013 and comment on the same.

To determine

(d)

Introduction:

Return on equity measure the profit earned using capital provided by the shareholders of a firm or in other words we can say that ROI measures the effectiveness with which a company uses the assets to create profits.

To calculate:

The return on equity for 2012 and 2013 and comment on the same.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 13, Problem 4E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2013 and 2012 and comment on the same.

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To compute:

The net profit margin for 2012 and 2013 and state if the company was successful in controlling its operating expenses by comparing the data of both the years.

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2012 and 2013 and comment on the same.

To determine

(d)

Introduction:

Return on equity measure the profit earned using capital provided by the shareholders of a firm or in other words we can say that ROI measures the effectiveness with which a company uses the assets to create profits.

To calculate:

The return on equity for 2012 and 2013 and comment on the same.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 13, Problem 4E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2013 and 2012 and comment on the same.

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To compute:

The net profit margin for 2012 and 2013 and state if the company was successful in controlling its operating expenses by comparing the data of both the years.

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2012 and 2013 and comment on the same.

To determine

(d)

Introduction:

Return on equity measure the profit earned using capital provided by the shareholders of a firm or in other words we can say that ROI measures the effectiveness with which a company uses the assets to create profits.

To calculate:

The return on equity for 2012 and 2013 and comment on the same.

Answer 6

Chapter 13, Problem 4E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2013 and 2012 and comment on the same.

Answer 7

Chapter 13, Problem 4E

To determine

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2013 and 2012 and comment on the same.

Answer 8

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To compute:

The net profit margin for 2012 and 2013 and state if the company was successful in controlling its operating expenses by comparing the data of both the years.

Answer 9

To determine

(b)

Introduction:

Profit margin ratio is calculated by dividing net income by the net sales. It helps in calculating the net income as a percentage of revenue.

To compute:

The net profit margin for 2012 and 2013 and state if the company was successful in controlling its operating expenses by comparing the data of both the years.

Answer 10

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2012 and 2013 and comment on the same.

Answer 11

To determine

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2012 and 2013 and comment on the same.

Answer 12

To determine

(d)

Introduction:

Return on equity measure the profit earned using capital provided by the shareholders of a firm or in other words we can say that ROI measures the effectiveness with which a company uses the assets to create profits.

To calculate:

The return on equity for 2012 and 2013 and comment on the same.

Answer 13

To determine

(d)

Introduction:

Return on equity measure the profit earned using capital provided by the shareholders of a firm or in other words we can say that ROI measures the effectiveness with which a company uses the assets to create profits.

To calculate:

The return on equity for 2012 and 2013 and comment on the same.

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 13 - Prob. 1Q Ch. 13 - Prob. 2Q Ch. 13 - What is ratio analysis? Why is it useful? Ch. 13 - What benchmarks are commonly used for interpreting...Ch. 13 - Prob. 5Q Ch. 13 - Why are some analyses called horizontal and others...Ch. 13 - Slow Cellar’s current ratio increased from 1.2 to...Ch. 13 - From last year to this year. Colossal Company’s...Ch. 13 - From last year to this year, Berry Barn reported...Ch. 13 - Prob. 10Q

(a) Introduction: Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory. To calculate: The gross profit percentage for 2013 and 2012 and comment on the same.

Solution Summary: The author explains that gross profit percentage helps the company to compare gross margin to the net sales. Asset turnover ratio determines a company's ability to generate sales with fixed assets.

Videos

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2013 and 2012 and comment on the same.

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2012 and 2013 and comment on the same.

Want to see the full answer?

Chapter 13 Solutions

(a) Introduction: Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory. To calculate: The gross profit percentage for 2013 and 2012 and comment on the same.

Solution Summary: The author explains that gross profit percentage helps the company to compare gross margin to the net sales. Asset turnover ratio determines a company's ability to generate sales with fixed assets.

Videos

(a) Introduction: Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory. To calculate: The gross profit percentage for 2013 and 2012 and comment on the same.

(c) Introduction: Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets. To calculate: The fixed asset turnover ratio for 2012 and 2013 and comment on the same.

Want to see the full answer?

Chapter 13 Solutions

(a)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To calculate:

The gross profit percentage for 2013 and 2012 and comment on the same.

(c)

Introduction:

Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To calculate:

The fixed asset turnover ratio for 2012 and 2013 and comment on the same.