Consider the following excerpt of Butterfly Corporation's balance sheet and income statement Use the excerpt of Corporation's balance sheet and its income statement to compute 's profit margin and return on assets for 2022 and 2023. Comment on Butterfly's profitability and changes in profitability from 2022 to 2023 . Butterfly's total assets at the end of were $169,000 million.(in millions)20232022Sales$67,000$66,000Cost of Goods Sold34,00033,700Gross Profit33,00032,300Selling, General, and Administrative Expenses15,00015,100Research and Development Expense7,5007,700Interest Expense190185Earnings before Taxes10,3109,315Income Tax Expense3,1003,000Net Income$7,210$6,315Assets (dollars in millions)20232022Current Assets Cash and Cash Equivalents$20,000$28,000Marketable Securities7,9002,900Accounts Receivable Trade, Net24,00023,000Inventories53,00050,000Prepaid Expenses and Other Receivables2,0001,800Total Current Assets106,900105,700Property, Plant, and Equipment, Net74,00071,000Other Assets3,9003,600Total Assets$184,800$180,300 Begin by determining Butterfly's profit marginNow determine Butterflys Return on Assets and Average Total Asset

Answered: Consider the following excerpt of…

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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Question

Consider the following excerpt of Butterfly Corporation's balance sheet and income statement Use the excerpt of Corporation's balance sheet and its income statement to compute 's profit margin and return on assets for 2022 and 2023. Comment on Butterfly's profitability and changes in profitability from 2022 to 2023 . Butterfly's total assets at the end of were $169,000 million.

(in millions)	2023	2022
Sales	$67,000	$66,000
Cost of Goods Sold	34,000	33,700
Gross Profit	33,000	32,300
Selling, General, and Administrative Expenses	15,000	15,100
Research and Development Expense	7,500	7,700
Interest Expense	190	185
Earnings before Taxes	10,310	9,315
Income Tax Expense	3,100	3,000
Net Income	$7,210	$6,315

Assets (dollars in millions)	2023	2022
Current Assets
Cash and Cash Equivalents	$20,000	$28,000
Marketable Securities	7,900	2,900
Accounts Receivable Trade, Net	24,000	23,000
Inventories	53,000	50,000
Prepaid Expenses and Other Receivables	2,000	1,800
Total Current Assets	106,900	105,700
Property, Plant, and Equipment, Net	74,000	71,000
Other Assets	3,900	3,600
Total Assets	$184,800	$180,300

Begin by determining Butterfly's profit margin
Now determine Butterflys Return on Assets and Average Total Asset

Expert Solution

Step 1

Ratio analysis is quantitive method of getting inside review of an organisation. Which able to provide compression between financial statements of two organisations or with past years results.

Thare are various types of Ratio such as profitability Ratio, solvency Ratio, liquidity ratio etc.