The average price of a gallon of gas in 2018 increased $0.30 (12.4 percent) from $2.42 in 2017 to $2.72 in 2018. Let's see whether these changes are reflected in the income statement of Bronze, Incorporated for the year ended December 31, 2018 (amounts in billions). Revenues Costs of Purchased Crude Oil and Products Other Operating Costs Income before Income Tax Expense Income Tax Expense Net Income L Required 1 Required 2 Required 3 2018 $ 252 144 76 32 9 $ 23 Required: 1. Compute the gross profit percentage for each year. Assuming the change from 2017 to 2018 is the beginning of a sustained trend, is Bronze likely to earn more or less gross profit from each dollar of sales in 2019? 2. Compute the net profit margin for each year. Did Bronze do a better or worse job of controlling expenses other than the costs of crude oil and products in 2018 relative to 2017? 3. Bronze reported average net fixed assets of $366 billion in 2018 and $364 billion in 2017. Compute the fixed asset turnover ratios for both years. Did the company better utilize its investment in fixed assets to generate revenues in 2018 or 2017? 4. Bronze reported average stockholders' equity of $176 billion in 2018 and $172 billion in 2017. The company has not issued preferred stock. Compute the return on equity ratios for both years. Did the company generate greater returns for stockholders in 2018 or 2017? Required 4 2017 2017 $ 214 115 86 13 - Complete this question by entering your answers in the tabs below. $ 13 1-a. Compute the gross profit percentage for each year. Note: Round percentage values to 1 decimal place. 1-b. Assuming the change from 2017 to 2018 is the beginning of a sustained trend, is Bronze likely to earn more or less gross profit from each dollar of sales in 2019? Show less
The average price of a gallon of gas in 2018 increased $0.30 (12.4 percent) from $2.42 in 2017 to $2.72 in 2018. Let's see whether these changes are reflected in the income statement of Bronze, Incorporated for the year ended December 31, 2018 (amounts in billions). Revenues Costs of Purchased Crude Oil and Products Other Operating Costs Income before Income Tax Expense Income Tax Expense Net Income L Required 1 Required 2 Required 3 2018 $ 252 144 76 32 9 $ 23 Required: 1. Compute the gross profit percentage for each year. Assuming the change from 2017 to 2018 is the beginning of a sustained trend, is Bronze likely to earn more or less gross profit from each dollar of sales in 2019? 2. Compute the net profit margin for each year. Did Bronze do a better or worse job of controlling expenses other than the costs of crude oil and products in 2018 relative to 2017? 3. Bronze reported average net fixed assets of $366 billion in 2018 and $364 billion in 2017. Compute the fixed asset turnover ratios for both years. Did the company better utilize its investment in fixed assets to generate revenues in 2018 or 2017? 4. Bronze reported average stockholders' equity of $176 billion in 2018 and $172 billion in 2017. The company has not issued preferred stock. Compute the return on equity ratios for both years. Did the company generate greater returns for stockholders in 2018 or 2017? Required 4 2017 2017 $ 214 115 86 13 - Complete this question by entering your answers in the tabs below. $ 13 1-a. Compute the gross profit percentage for each year. Note: Round percentage values to 1 decimal place. 1-b. Assuming the change from 2017 to 2018 is the beginning of a sustained trend, is Bronze likely to earn more or less gross profit from each dollar of sales in 2019? Show less
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:The average price of a gallon of gas in 2018 increased $0.30 (12.4 percent) from $2.42 in 2017 to $2.72 in 2018. Let's see whether
these changes are reflected in the income statement of Bronze, Incorporated for the year ended December 31, 2018 (amounts in
billions).
Revenues
Costs of Purchased Crude Oil and Products
Other Operating Costs
Income before Income Tax Expense
Income Tax Expense
Net Income
2018
$ 252
144
76
32
9
$ 23
Required 1 Required 2 Required 3 Required 4
Required:
1. Compute the gross profit percentage for each year. Assuming the change from 2017 to 2018 is the beginning of a sustained trend,
is Bronze likely to earn more or less gross profit from each dollar of sales in 2019?
2. Compute the net profit margin for each year. Did Bronze do a better or worse job of controlling expenses other than the costs of
crude oil and products in 2018 relative to 2017?
3. Bronze reported average net fixed assets of $366 billion in 2018 and $364 billion in 2017. Compute the fixed asset turnover ratios
for both years. Did the company better utilize its investment in fixed assets to generate revenues in 2018 or 2017?
4. Bronze reported average stockholders' equity of $176 billion in 2018 and $172 billion in 2017. The company has not issued preferred
stock. Compute the return on equity ratios for both years. Did the company generate greater returns for stockholders in 2018 or
2017?
1-a. Compute the gross profit percentage for each year.
Note: Round percentage values to 1 decimal place.
Complete this question by entering your answers in the tabs below.
1-a. 2017 gross profit percentage
1-a. 2018 gross profit percentage
1-b. Likely to earn in 2019?
2017
$ 214
115
86
13
< Required 1
$ 13
1-b. Assuming the change from 2017 to 2018 is the beginning of a sustained trend, is Bronze likely to earn more or less gross
profit from each dollar of sales in 2019?
%
%
Required 2 >
Show less
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