Gross Profit PercentageCalculate the company's 2020 gross profit percentage and compare the result to the industry average. Assignments with the ne logo in the margin are available in BusinessCourse.See the Preface of the book for details.SHORT EXERCISESUse the following financial data for Hi-Tech Instruments to answer Short Exercises 12-1 through 12-10:2020 (Thousands of Dollars, except Earnings per Share)Sales revenue.$210,00o125,000Cost of goods soldNet income .8,3002,600DividendsEarnings per share.4.15HI-TECH INSTRUMENTS, INc.Balance Sheets(Thousands of Dollars)Dec. 31, 2020Dec. 31, 2019AssetsCash$,300$ 18,000Accounts receivable (net)Inventory.46,00041,00039,50043,700Total Current Assets103,80052,600102,700Plant assets (net)50,500Other assets15,60013,800Total Assets$172,00O$167,000continued continued from previous pageHI-TECH INSTRUMENTS, INC.Balance Sheets(Thousands of Dollars)Dec. 31, 2020Dec. 31, 2019Liabilities and Stockholders' EquityNotes payable-banksAccounts payable.$22,5006,0006,00018,700Accrued liabilities16,50021,00045,00040,000Total Current Liabilities45,7009% Bonds payable40,000Total Liabilities.85,00085,700Common stock, $25 par value (2,000,000 shares).Retained earnings50,00037,00050,00031,300Total Stockholders' Equity.87,00081,300Total Liabilities and Stockholders’ Equity$172,00o$167,00OIndustry Average Ratios for CompetitorsQuick ratio1.3Current ratio2.4Accounts receivable turnover5.9 timesInventory turnover.Debt-to-equity ratio.Gross profit percentageProfit margin.Return on assets3.5 times0.7342.8 percent4.5 percent7.6 percent

Answered: Gross Profit Percentage Calculate the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Gross Profit Percentage

Calculate the company's 2020 gross profit percentage and compare the result to the industry average.

Transcribed Image Text:Assignments with the ne logo in the margin are available in BusinessCourse. See the Preface of the book for details. SHORT EXERCISES Use the following financial data for Hi-Tech Instruments to answer Short Exercises 12-1 through 12-10: 2020 (Thousands of Dollars, except Earnings per Share) Sales revenue. $210,00o 125,000 Cost of goods sold Net income . 8,300 2,600 Dividends Earnings per share. 4.15 HI-TECH INSTRUMENTS, INc. Balance Sheets (Thousands of Dollars) Dec. 31, 2020 Dec. 31, 2019 Assets Cash $ ,300 $ 18,000 Accounts receivable (net) Inventory. 46,000 41,000 39,500 43,700 Total Current Assets 103,800 52,600 102,700 Plant assets (net) 50,500 Other assets 15,600 13,800 Total Assets $172,00O $167,000 continued

continued from previous page
HI-TECH INSTRUMENTS, INC.
Balance Sheets
(Thousands of Dollars)
Dec. 31, 2020
Dec. 31, 2019
Liabilities and Stockholders' Equity
Notes payable-banks
Accounts payable.
$
22,500
6,000
6,000
18,700
Accrued liabilities
16,500
21,000
45,000
40,000
Total Current Liabilities
45,700
9% Bonds payable
40,000
Total Liabilities.
85,000
85,700
Common stock, $25 par value (2,000,000 shares).
Retained earnings
50,000
37,000
50,000
31,300
Total Stockholders' Equity.
87,000
81,300
Total Liabilities and Stockholders’ Equity
$172,00o
$167,00O
Industry Average Ratios for Competitors
Quick ratio
1.3
Current ratio
2.4
Accounts receivable turnover
5.9 times
Inventory turnover.
Debt-to-equity ratio.
Gross profit percentage
Profit margin.
Return on assets
3.5 times
0.73
42.8 percent
4.5 percent
7.6 percent

Expert Solution

Step 1

Gross profits are profits before operating expenses.

Step 2

Gross profit = Total sales – Cost of goods sold

= $2,10,000 - $1,25,000

= $85,000

Step by step

Solved in 3 steps with 2 images

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions