Return on Sales The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars, except earnings per share.)     2016 Sales revenue $211,000 Cost of goods sold 125,000 Net income 8,800 Dividends 3,100 Earnings per share 4.40       Hi-Tech Instruments, Inc. Balance Sheet (Thousands of Dollars) Dec. 31, 2016 Dec. 31, 2015 Assets     Cash $18,300 $18,000 Accounts receivable (net) 46,000 41,000 Inventory 39,500 43,700 Total current assets 103,800 102,700 Plant assets (net) 52,600 50,500 Other assets 15,600 13,800 Total assets $172,000 $167,000 Liabilities and Stockholders' Equity     Notes payable-banks $6,000 $6,000 Accounts payable 22,500 18,700 Accrued liabilities 16,500 21,000 Total current liabilities 45,000 45,700 9% Bonds payable 40,000 40,000 Total liabilities 85,000 85,700 Common stock, $25 par value (2,000,000 shares) 50,000 50,000 Retained earnings 37,000 31,300 Total stockholders' equity 87,000 81,300 Total liabilities and stockholders' equity $172,000 $167,000       Industry Average Ratios for Competitors Quick ratio 1.3 Current ratio 2.4 Accounts receivable turnover 5.9 times Inventory turnover 3.5 times Debt-to-equity ratio 0.73 Gross profit percentage 42.8 percent Return on sales 4.5 percent Return on assets 7.6 percent     Calculate the company's return on sales for 2016. Round answer to one decimal place. (Ex.: 0.2345 = 23.5%) Answer   %

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Return on Sales
The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars, except earnings per share.)

 

 

2016
Sales revenue $211,000
Cost of goods sold 125,000
Net income 8,800
Dividends 3,100
Earnings per share 4.40

 

 

 

Hi-Tech Instruments, Inc.
Balance Sheet

(Thousands of Dollars)

Dec. 31, 2016 Dec. 31, 2015
Assets    
Cash $18,300 $18,000
Accounts receivable (net) 46,000 41,000
Inventory 39,500 43,700
Total current assets 103,800 102,700
Plant assets (net) 52,600 50,500
Other assets 15,600 13,800
Total assets $172,000 $167,000
Liabilities and Stockholders' Equity    
Notes payable-banks $6,000 $6,000
Accounts payable 22,500 18,700
Accrued liabilities 16,500 21,000
Total current liabilities 45,000 45,700
9% Bonds payable 40,000 40,000
Total liabilities 85,000 85,700
Common stock, $25 par value (2,000,000 shares) 50,000 50,000
Retained earnings 37,000 31,300
Total stockholders' equity 87,000 81,300
Total liabilities and stockholders' equity $172,000 $167,000

 

 

 

Industry Average Ratios for Competitors
Quick ratio 1.3
Current ratio 2.4
Accounts receivable turnover 5.9 times
Inventory turnover 3.5 times
Debt-to-equity ratio 0.73
Gross profit percentage 42.8 percent
Return on sales 4.5 percent
Return on assets 7.6 percent

 

 

Calculate the company's return on sales for 2016.

Round answer to one decimal place. (Ex.: 0.2345 = 23.5%)

Answer

 

%

 

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