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Exercise 12-6 (Algo) Evaluate profitability ratios (LO12-4) The 2024 income statement of Adrian Express reports sales of $21,310,000, cost of goods sold of $12,750,000, and net income of $2,100,000. Balance sheet information is provided in the following table. Assets Current assets: Cash Accounts receivable. Inventory ADRIAN EXPRESS Balance Sheets December 31, 2024 and 2023 Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities. Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity Industry averages for the following four risk ratios are as follows: Gross profit ratio: 45% 25% Return on assets Profit margin Asset turnover 15% Return on equity 11.5 35% times. 2024 2023 $900,000 $960,000 1,850,000 1,250,000 2,350,000 1,750,000 5,100,000 4,440,000 $10,200,000 $8,400,000 $2,140,000 $1,880,000 2,580,000 2,620,000 2,150,000 2,050,000 3,330,000 1,850,000 $10,200,000 $8,400,000 Required: 1. Calculate the five profitability ratios listed above for Adrian Express. 2. Do you think the company is more profitable or less profitable than the industry average?

Exercise 12-6 (Algo) Evaluate profitability ratios (LO12-4) The 2024 income statement of Adrian Express reports sales of $21,310,000, cost of goods sold of $12,750,000, and net income of $2,100,000. Balance sheet information is provided in the following table. Assets Current assets: Cash Accounts receivable. Inventory ADRIAN EXPRESS Balance Sheets December 31, 2024 and 2023 Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities. Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity Industry averages for the following four risk ratios are as follows: Gross profit ratio: 45% 25% Return on assets Profit margin Asset turnover 15% Return on equity 11.5 35% times. 2024 2023 $900,000 $960,000 1,850,000 1,250,000 2,350,000 1,750,000 5,100,000 4,440,000 $10,200,000 $8,400,000 $2,140,000 $1,880,000 2,580,000 2,620,000 2,150,000 2,050,000 3,330,000 1,850,000 $10,200,000 $8,400,000 Required: 1. Calculate the five profitability ratios listed above for Adrian Express. 2. Do you think the company is more profitable or less profitable than the industry average?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Exercise 12-6 (Algo) Evaluate profitability ratios (LO12-4) The 2024 income statement of Adrian Express reports sales of $21,310,000, cost of goods sold of $12,750,000, and net income of $2,100,000. Balance sheet information is provided in the following table. Assets Current assets: Cash Accounts receivable Inventory Long-term assets Total assets ADRIAN EXPRESS Balance Sheets December 31, 2024 and 2023 Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity Industry averages for the following four risk ratios are as follows: Gross profit ratio Return on assets. Profit margin Asset turnover Return on equity 45% 25% 15% 11.5 35% times 2024 2023 $900,000 $960,000 1,850,000 1,250,000 2,350,000 1,750,000 5,100,000 4,440,000 $10,200,000 $8,400,000 $2,140,000 $1,880,000 2,580,000 2,620,000 2,150,000 2,050,000 3,330,000 1,850,000 $10,200,000 $8,400,000 Complete this question by entering your answers in the tabs below. Required: 1. Calculate the five profitability ratios listed above for Adrian Express. 2. Do you think the company is more profitable or less profitable than the industry average?
Transcribed Image Text:Exercise 12-6 (Algo) Evaluate profitability ratios (LO12-4) The 2024 income statement of Adrian Express reports sales of $21,310,000, cost of goods sold of $12,750,000, and net income of $2,100,000. Balance sheet information is provided in the following table. Assets Current assets: Cash Accounts receivable Inventory Long-term assets Total assets ADRIAN EXPRESS Balance Sheets December 31, 2024 and 2023 Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity Industry averages for the following four risk ratios are as follows: Gross profit ratio Return on assets. Profit margin Asset turnover Return on equity 45% 25% 15% 11.5 35% times 2024 2023 $900,000 $960,000 1,850,000 1,250,000 2,350,000 1,750,000 5,100,000 4,440,000 $10,200,000 $8,400,000 $2,140,000 $1,880,000 2,580,000 2,620,000 2,150,000 2,050,000 3,330,000 1,850,000 $10,200,000 $8,400,000 Complete this question by entering your answers in the tabs below. Required: 1. Calculate the five profitability ratios listed above for Adrian Express. 2. Do you think the company is more profitable or less profitable than the industry average?
15 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the five profitability ratios listed above for Adrian Express. (Round your answers to 1 decimal place.) Profitability Ratios Gross profit ratio Return on assets Profit margin Asset turnover Return on equity % % % times % Required 1 Required 2 >
Transcribed Image Text:15 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the five profitability ratios listed above for Adrian Express. (Round your answers to 1 decimal place.) Profitability Ratios Gross profit ratio Return on assets Profit margin Asset turnover Return on equity % % % times % Required 1 Required 2 >
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