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
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter7: Analysis Of Financial Statements
Section: Chapter Questions
Problem 5MC
Related questions
Question
Income statement and balance sheet data for The Athletic Attic are provided below.
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.)
![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa67304b1-3709-41d7-a763-4eb6f13a6e63%2F72132fa0-7235-4f63-9d19-c978246fbf98%2F5xbbkdh_processed.png&w=3840&q=75)
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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