Using the income statement for Pacific Coast Manufacturing Co., compute the following ratios: PACIFIC COAST MANUFACTURING CO. Income Statement Sales Cost of goods sold Gross profit $375,000 $195,000 $180,000 Selling and administrative expense $87,500 Lease expense $32,500 Operating profit* $60,000 Interest expense $15,000 Earnings before taxes $45,000 Taxes (25%) $11,250 Earnings after taxes $33,750 *Equals income before interest and taxes. Total assets for the company are $420,000. a. Compute the profit margin ratio. b. Compute the total asset turnover ratio. c. Compute the return on assets (investment).

Using the income statement for Pacific Coast Manufacturing Co., compute the following ratios: PACIFIC COAST MANUFACTURING CO. Income Statement Sales Cost of goods sold Gross profit $375,000 $195,000 $180,000 Selling and administrative expense $87,500 Lease expense $32,500 Operating profit* $60,000 Interest expense $15,000 Earnings before taxes $45,000 Taxes (25%) $11,250 Earnings after taxes $33,750 *Equals income before interest and taxes. Total assets for the company are $420,000. a. Compute the profit margin ratio. b. Compute the total asset turnover ratio. c. Compute the return on assets (investment).

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 2MC: The following information is available for Cooke Company for the current year: The gross margin is...

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