Managerial Accounting
6th Edition
ISBN: 9781259726972
Author: John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 13, Problem 11QS
To determine
Concept introduction:
Profit margin:
Profit margin is a measurement of profitability of a company which shows relationship between net income and net sales. This ratio tells that how much portion of net sales is earned by the company as net income.
(a) Profit margin
(b) Return on total assets
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Students have asked these similar questions
Edison Company reported the following for the current year:
$ 84,000
59,000
21,080
63,000
77,080
Net sales
Cost of goods sold
Net income
Beginning balance of total assets
Ending balance of total assets
Compute (a) profit margin and (b) return on total assets.
Complete this question by entering your answers in the tabs below.
Profit Margin
Ratio
Compute the return on total assets.
Return On
Total Assets
Numerator:
7
7
7
Return On Total Assets
Denominator:
= Return On Total Assets
Return on total assets
II
=
Calculating the Average Total Assets and the Return on Assets
The income statement, statement of retained earnings, and balance sheet for Santiago Systems are as follows:
Santiago Systems
Income Statement
For the Year Ended December 31, 20X2
Amount
Percent
Net sales
$5,345,000
100.0%
Less: Cost of goods sold
(3,474,250)
65.0
Gross margin
$1,870,750
35.0
Less: Operating expenses
(1,140,300)
21.3
Operating income
$730,450
13.7
Less: Interest expense
(27,000)
0.5
Income before taxes
Less: Income taxes (40%)*
$703,450
13.2
(281,380)
5.3
Net income
$422,070
7.9
* Includes both state and federal taxes.
Comparative income statements and balance sheets for F&N are shown below ($ millions):
Year 2
Year 1
Income Statement
$19,889
6,204
Net sales.
$20,092
6,044
Cost of goods
Gross profit.
Selling, general, and administrative expense
Depreciation and amortization expense
Interest expense (revenue)
14,048
7,893
803
(308)
13,685
9,221
773
292
3,399
1,222
Income before tax
5,660
1,691
Income tax expense.
Net income
$ 3,969
$ 2,177
Outstanding shares
3,491
3,481
Chapter 13 Solutions
Managerial Accounting
Ch. 13 - Prob. 1MCQCh. 13 - Prob. 2MCQCh. 13 - Prob. 3MCQCh. 13 - Prob. 4MCQCh. 13 - Prob. 5MCQCh. 13 - Prob. 1DQCh. 13 - Prob. 2DQCh. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQ
Ch. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - Prob. 9DQCh. 13 - Prob. 10DQCh. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - Where on the income statement does a company...Ch. 13 - Prob. 14DQCh. 13 - Prob. 15DQCh. 13 - Samsung Refer to Samsung’s financial statements in...Ch. 13 - Prob. 17DQCh. 13 - Prob. 1QSCh. 13 - Prob. 2QSCh. 13 - Prob. 3QSCh. 13 - Prob. 4QSCh. 13 - Prob. 5QSCh. 13 - Prob. 6QSCh. 13 - Prob. 7QSCh. 13 - Prob. 8QSCh. 13 - Prob. 9QSCh. 13 - Prob. 10QSCh. 13 - Prob. 11QSCh. 13 - Prob. 12QSCh. 13 - Prob. 13QSCh. 13 - Morgan Company and Parker Company are similar...Ch. 13 - Which of the following gains or losses would...Ch. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Exercise 13-6 Common-size percents P2
Simon...Ch. 13 - Prob. 7ECh. 13 - Exercise 13-8 Liquidity analysis and...Ch. 13 - Exercise 13-9 Risk and Capital structure analysis...Ch. 13 - Exercise 13-10 Efficiency and Profitability...Ch. 13 - Exercise 13-11 profitability analysis P3 Refer to...Ch. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Prob. 14ECh. 13 - Prob. 15ECh. 13 - Exercise Interpreting financial ratios Refer to...Ch. 13 - Prob. 17ECh. 13 - Prob. 18ECh. 13 - Prob. 1PSACh. 13 - Prob. 2PSACh. 13 - Prob. 3PSACh. 13 - Problem 13-4A Calculation of financial statement...Ch. 13 - Prob. 5PSACh. 13 - Prob. 6PSACh. 13 - Prob. 1PSBCh. 13 - Prob. 2PSBCh. 13 - Prob. 3PSBCh. 13 - Prob. 4PSBCh. 13 - Prob. 5PSBCh. 13 - Problem 13-6BAIncome statement computations and...Ch. 13 - Use the following selected data from Business...Ch. 13 - Use Apple’s financial statements in Appendix A to...Ch. 13 - Prob. 2AACh. 13 - Prob. 3AACh. 13 - Prob. 1BTNCh. 13 - Prob. 2BTNCh. 13 - Prob. 3BTNCh. 13 - Prob. 4BTNCh. 13 - ENTREPRENEURIAL DECISION A1 P1 P2 P3 BTN 13-7...Ch. 13 - Prob. 6BTN
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