MEGAFRAME COMPUTER COMPANY Balance Sheet As of December 31 ASSETS Cash $ 50,000 Accounts receivable 70,000 Inventory 110,000 Net plant and equipment 220,000 Total assets $ 450,000 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 70,000 Accrued expenses 50,000 Long-term debt 130,000 Common stock 70,000 Paid-in capital 40,000 Retained earnings 90,000 Total liabilities and stockholders' equity $ 450,000 MEGAFRAME COMPUTER COMPANY Income Statement For the year ended December 31 Sales (all on credit) $ 875,000 Cost of goods sold 600,000 Gross profit $ 275,000 Sales and administrative expenses 30,000 Depreciation 55,000 Operating profit $ 190,000 Interest expense 25,000 Profit before taxes $ 165,000 Taxes (30%) 49,500 Net income $ 115,500 Please use the tables above to calculate followings ratios and show your work: (1) ROE (2) Net Profit Margin (3) ROA
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MEGAFRAME COMPUTER COMPANY |
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As of December 31 |
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ASSETS |
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Cash |
$ |
50,000 |
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Accounts receivable |
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70,000 |
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Inventory |
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110,000 |
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Net plant and equipment |
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220,000 |
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Total assets |
$ |
450,000 |
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LIABILITIES AND |
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Accounts payable |
$ |
70,000 |
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Accrued expenses |
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50,000 |
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Long-term debt |
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130,000 |
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Common stock |
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70,000 |
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Paid-in capital |
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40,000 |
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90,000 |
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Total liabilities and stockholders' equity |
$ |
450,000 |
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MEGAFRAME COMPUTER COMPANY |
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Income Statement |
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For the year ended December 31 |
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Sales (all on credit) |
$ |
875,000 |
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Cost of goods sold |
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600,000 |
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Gross profit |
$ |
275,000 |
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Sales and administrative expenses |
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30,000 |
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55,000 |
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Operating profit |
$ |
190,000 |
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Interest expense |
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25,000 |
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Profit before taxes |
$ |
165,000 |
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Taxes (30%) |
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49,500 |
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Net income |
$ |
115,500 |
Please use the tables above to calculate followings ratios and show your work:
(1) ROE
(2) Net Profit Margin
(3) ROA
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