The 2024 income statement of Adrian Express reports sales of $22,910, 000, cost of goods sold of $13,150,000, and net income of $2,420,000. Balance sheet information is provided in the following table. ADRIAN EXPRESS Balance Sheets December 31, 2024 and 2023 2024 2023 Assets Current assets: Cash $1,060,000 $1,040,000 Accounts receivable 2,050,000 1,370,000 Inventory 2, 630,000 1,950,000 Long-term assets 5, 260, 000 4,520,000 Total assets $11,000,000 $8,880,000 Liabilities and Stockholders' Equity Current liabilities $2,316,000 $1,976,000 Long - term liabilities 2, 724,000 2,716, 000 Common stock 2, 350,000 2,170,000 Retained earnings 3,610,000 2,018,000 Total liabilities and stockholders' equity $11,000,000 $8,880,000 Industry averages for the following four risk ratios are as follows: Gross profit ratio 45% Return on assets 25% Profit margin 15% Asset turnover 19.5 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?

The 2024 income statement of Adrian Express reports sales of $22,910, 000, cost of goods sold of $13,150,000, and net income of $2,420,000. Balance sheet information is provided in the following table. ADRIAN EXPRESS Balance Sheets December 31, 2024 and 2023 2024 2023 Assets Current assets: Cash $1,060,000 $1,040,000 Accounts receivable 2,050,000 1,370,000 Inventory 2, 630,000 1,950,000 Long-term assets 5, 260, 000 4,520,000 Total assets $11,000,000 $8,880,000 Liabilities and Stockholders' Equity Current liabilities $2,316,000 $1,976,000 Long - term liabilities 2, 724,000 2,716, 000 Common stock 2, 350,000 2,170,000 Retained earnings 3,610,000 2,018,000 Total liabilities and stockholders' equity $11,000,000 $8,880,000 Industry averages for the following four risk ratios are as follows: Gross profit ratio 45% Return on assets 25% Profit margin 15% Asset turnover 19.5 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?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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