E3-18 (Static) Analyzing the Effects of Transactions Using T-Accounts and Interpreting the Net Profit Margin Ratio as a Financial Analyst LO3-4, 3-6 [The following information applies to the questions displayed below.] Massa Company, which has been operating for three years, provides marketing consulting services worldwide for dot-com companies. You are a financial analyst assigned to report on the Massa management team's effectiveness at managing its assets efficiently. At the start of 2019 (its fourth year), Massa's T-account balances were as follows. Dollars are in thousands. Assets Cash Accounts Receivable 3,200 8,000 Long-Term Investments 6,400 Liabilities Accounts Payable Unearned Revenue Long-Term Notes Payable Stockholders' Equity Common Stock ($0.10 par value) Additional Paid-in Capital Retained Earnings Revenues Consulting Fee Revenue Interest Revenue Expenses Wages Expense Travel Expense Utilities Expense Rent Expense Transactions for 2019: a. Provided $58,000 in services to clients who paid $48,000 in cash and owed the rest on account. b. Received $5,600 cash from clients on account. c. Received $400 in cash as interest revenue on investments. d. Paid $36,000 in wages, $12,000 in travel, $7,600 in rent, and $1,600 on accounts payable. e. Received $1,600 in cash from clients in advance of services Massa will provide next year. f. Received a utility bill for $800 for 2019 services. g. Declared and immediately paid $480 in dividends to stockholders. E3-18 Part 4 4. Calculate the net profit margin ratio for 2019. (Round your answer to 2 decimal places.) Net profit margin ratio % 2,400 1,600 800 3,200 5,600 4,000
E3-18 (Static) Analyzing the Effects of Transactions Using T-Accounts and Interpreting the Net Profit Margin Ratio as a Financial Analyst LO3-4, 3-6 [The following information applies to the questions displayed below.] Massa Company, which has been operating for three years, provides marketing consulting services worldwide for dot-com companies. You are a financial analyst assigned to report on the Massa management team's effectiveness at managing its assets efficiently. At the start of 2019 (its fourth year), Massa's T-account balances were as follows. Dollars are in thousands. Assets Cash Accounts Receivable 3,200 8,000 Long-Term Investments 6,400 Liabilities Accounts Payable Unearned Revenue Long-Term Notes Payable Stockholders' Equity Common Stock ($0.10 par value) Additional Paid-in Capital Retained Earnings Revenues Consulting Fee Revenue Interest Revenue Expenses Wages Expense Travel Expense Utilities Expense Rent Expense Transactions for 2019: a. Provided $58,000 in services to clients who paid $48,000 in cash and owed the rest on account. b. Received $5,600 cash from clients on account. c. Received $400 in cash as interest revenue on investments. d. Paid $36,000 in wages, $12,000 in travel, $7,600 in rent, and $1,600 on accounts payable. e. Received $1,600 in cash from clients in advance of services Massa will provide next year. f. Received a utility bill for $800 for 2019 services. g. Declared and immediately paid $480 in dividends to stockholders. E3-18 Part 4 4. Calculate the net profit margin ratio for 2019. (Round your answer to 2 decimal places.) Net profit margin ratio % 2,400 1,600 800 3,200 5,600 4,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
How to calculate the net profit margin ratio?
![**Required Information**
**E3-18 (Static) Analyzing the Effects of Transactions Using T-Accounts and Interpreting the Net Profit Margin Ratio as a Financial Analyst LO3-4, 3-6**
*[The following information applies to the questions displayed below]*
Massa Company, which has been operating for three years, provides marketing consulting services worldwide for dot-com companies. You are a financial analyst assigned to report on the Massa management team’s effectiveness at managing its assets efficiently. At the start of 2019 (its fourth year), Massa’s T-account balances were as follows. Dollars are in thousands.
### Assets
```
Cash | 3,200
--------
Accounts Receivable | 8,000
--------
Long-Term Investments | 6,400.
```
### Liabilities
```
Accounts Payable | 2,400
-------
Unearned Revenue | 5,600
--------
Long-Term Notes Payable | 1,600.
```
### Stockholders' Equity
```
Common Stock ($0.10 par value) | 800
--------
Additional Paid-in Capital | 4,000
--------
Retained Earnings | 3,200.
```
### Revenues
* Consulting Fee Revenue
* Interest Revenue
### Expenses
* Wages Expense
* Travel Expense
* Utilities Expense
* Rent Expense
### Transactions for 2019:
a. Provided $58,000 in services to clients who paid $48,000 in cash and owed the rest on account.
b. Received $5,600 cash from clients on account.
c. Received $400 in cash as interest revenue on investments.
d. Paid $36,000 in wages, $12,000 in travel, $7,600 in rent, and $1,600 on accounts payable.
e. Received $1,600 in cash from clients in advance of services Massa will provide next year.
f. Received a utility bill for $800 for 2019 services.
g. Declared and immediately paid $480 in dividends to stockholders.
#### E3-18 Part 4:
**4. Calculate the net profit margin ratio for 2019. (Round your answer to 2 decimal places.)**
```
Net profit margin ratio: ____________%
```
**Graphs/Diagrams Explanation:**
This document contains T-accounts to depict](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F266d5c88-4132-4eca-8561-6ebd3b0393f5%2Fee1b7785-f89b-4df5-b9d4-f0ab267d1d7d%2F9v5jc3c_processed.png&w=3840&q=75)
Transcribed Image Text:**Required Information**
**E3-18 (Static) Analyzing the Effects of Transactions Using T-Accounts and Interpreting the Net Profit Margin Ratio as a Financial Analyst LO3-4, 3-6**
*[The following information applies to the questions displayed below]*
Massa Company, which has been operating for three years, provides marketing consulting services worldwide for dot-com companies. You are a financial analyst assigned to report on the Massa management team’s effectiveness at managing its assets efficiently. At the start of 2019 (its fourth year), Massa’s T-account balances were as follows. Dollars are in thousands.
### Assets
```
Cash | 3,200
--------
Accounts Receivable | 8,000
--------
Long-Term Investments | 6,400.
```
### Liabilities
```
Accounts Payable | 2,400
-------
Unearned Revenue | 5,600
--------
Long-Term Notes Payable | 1,600.
```
### Stockholders' Equity
```
Common Stock ($0.10 par value) | 800
--------
Additional Paid-in Capital | 4,000
--------
Retained Earnings | 3,200.
```
### Revenues
* Consulting Fee Revenue
* Interest Revenue
### Expenses
* Wages Expense
* Travel Expense
* Utilities Expense
* Rent Expense
### Transactions for 2019:
a. Provided $58,000 in services to clients who paid $48,000 in cash and owed the rest on account.
b. Received $5,600 cash from clients on account.
c. Received $400 in cash as interest revenue on investments.
d. Paid $36,000 in wages, $12,000 in travel, $7,600 in rent, and $1,600 on accounts payable.
e. Received $1,600 in cash from clients in advance of services Massa will provide next year.
f. Received a utility bill for $800 for 2019 services.
g. Declared and immediately paid $480 in dividends to stockholders.
#### E3-18 Part 4:
**4. Calculate the net profit margin ratio for 2019. (Round your answer to 2 decimal places.)**
```
Net profit margin ratio: ____________%
```
**Graphs/Diagrams Explanation:**
This document contains T-accounts to depict
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