10: Application of Financial Ratios Used to Measure ProfitabilityThe income statement of Garnet Mfg. Corp. for 2018 shows the following:Sales, netP 700,00015,000400,000Net credit salesCost of goods soldCost of goods manufacturedNet credit purchases410,000150,000225,00090,000212,50020,000Raw materials usedNet incomeTotal operating expensesDepreciationNet income90,000The balance sheet figures as of December 31, 2017 and 2018 are as follows:December 3120172018P12,500P 25,000Cash17,50028,750Marketable securities10,00020,000Accounts receivable, netInventories:25,00035,000Finished goodsWork in process22,50015,0003,750P 150,00037,50017,50010,000Raw materialsPrepaid expensesTotal current assets2,500P95,00037,500Investments117,500187,500Plant, property and equipment, net

Profitability for any company can be ascertained or determined through these financial ratios :…

10: Application of Financial Ratios Used to Measure Profitability The income statement of Garnet Mfg. Corp, for 2018 shows the following: Sales, net P 700,000 Net credit sales 15,000 Cost of goods sold Cost of goods manufactured Net credit purchases 400,000 410,000 150,000 225,000 90,000 212,500 Raw materials used Net income Total operating expenses Depreciation 20,000 Net income 90,000

10: Application of Financial Ratios Used to Measure Profitability The income statement of Garnet Mfg. Corp, for 2018 shows the following: Sales, net P 700,000 Net credit sales 15,000 Cost of goods sold Cost of goods manufactured Net credit purchases 400,000 410,000 150,000 225,000 90,000 212,500 Raw materials used Net income Total operating expenses Depreciation 20,000 Net income 90,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Comparative Income StatementsConsider the following income statement data from the Ross Company: Current Year Previous Year Sales revenue $525,000 $450,000 Cost of goods sold 336,000 279,000 Selling expenses 105,000 99,000 Administrative expenses 60,000 54,000 Income tax expense 7,800 5,400 Prepare a comparative income statement, showing increases and decreases in dollars and in percentages. Note: Round "Percent Change" answers to one decimal place (ex: 0.2345 = 23.5%). ROSS COMPANYComparative Income Statements Current Year Previous Year Increase(Decrease) PercentChange Sales Revenue Answer Answer Answer Answer Cost of Goods Sold Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Selling Expenses Answer Answer Answer Answer Administrative Expenses Answer Answer Answer Answer Total Answer Answer Answer Answer Income before Income Taxes Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer…
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