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 % times Return on equity %
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 % times Return on equity %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The 2024 income statement of Adrian Express reports sales of $21,510,000, cost of goods sold of $12,800,000, and net income of $2,140,000.
ADRIAN EXPRESS | ||
Balance Sheets | ||
December 31, 2024 and 2023 | ||
2024 | 2023 | |
---|---|---|
Assets | ||
Current assets: | ||
Cash | $920,000 | $970,000 |
1,875,000 | 1,265,000 | |
Inventory | 2,385,000 | 1,775,000 |
Long-term assets | 5,120,000 | 4,450,000 |
Total assets | $10,300,000 | $8,460,000 |
Liabilities and |
||
Current liabilities | $2,162,000 | $1,892,000 |
Long-term liabilities | 2,598,000 | 2,632,000 |
Common stock | 2,175,000 | 2,065,000 |
3,365,000 | 1,871,000 | |
Total liabilities and stockholders' equity | $10,300,000 | $8,460,000 |
Industry averages for the following four risk ratios are as follows:
Gross profit ratio | 45% | |
---|---|---|
Return on assets | 25% | |
Profit margin | 15% | |
Asset turnover | 12.5 | times |
Return on equity | 35% |
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?
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