Using the income statement for Times Mirror and Glass Co., compute the following ratios: TIMES MIRROR AND GLASS Co. Income Statement Sales Cost of goods sold Gross profit $ 209,000 106,000 $103,000 Selling and administrative expense 41,500 Lease expense 19,600 Operating profit* $ 41,900 Interest expense 8,800 Earnings before taxes $ 33,100 Taxes (30%) 13,240 Earnings after taxes $ 19,860 Equals income before interest and taxes. 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 Times Mirror and Glass Co., compute the following ratios: TIMES MIRROR AND GLASS Co. Income Statement Sales Cost of goods sold Gross profit $ 209,000 106,000 $103,000 Selling and administrative expense 41,500 Lease expense 19,600 Operating profit* $ 41,900 Interest expense 8,800 Earnings before taxes $ 33,100 Taxes (30%) 13,240 Earnings after taxes $ 19,860 Equals income before interest and taxes. a. Compute the profit margin ratio. b. Compute the total asset turnover ratio. c. Compute the return on assets (investment).

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...

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The following is select account information for August Sundries. Sales: $850,360; Sales Returns and Allowances: $148,550; COGS: $300,840; Operating Expenses: $45,770; Sales Discounts: $231,820. If August Sundries uses a multi-step income statement format, what is their gross margin?
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