Financial Ratios: Financial ratios are the metrics used to evaluate the capabilities, profitability, and overall performance of a company. Evaluation of profitability: In general, financial ratios are used to evaluate capabilities, profitability, and overall performance of a company. The following are the ratios that evaluate the profitability of a company: Profit margin ratio: Profit margin ratio is used to determine the percentage of net income that is being generated per dollar of revenue or sales. Formula: Profit Margin = Net income Net revenue To compute: Profit margin ratio for 2019.

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Answer 1

Question

Chapter 13, Problem 13.10E

Instruction a:

To determine

Financial Ratios: Financial ratios are the metrics used to evaluate the capabilities, profitability, and overall performance of a company.

Evaluation of profitability: In general, financial ratios are used to evaluate capabilities, profitability, and overall performance of a company. The following are the ratios that evaluate the profitability of a company:

Profit margin ratio: Profit margin ratio is used to determine the percentage of net income that is being generated per dollar of revenue or sales.

Formula: Profit Margin=Net incomeNet revenue

To compute: Profit margin ratio for 2019.

Instruction b:

To determine

Rate of return on total assets: Return on assets determines the particular company’s overall earning power.

Formula: Rate of return on assets=Net incomeAverage total assets

To compute: Asset turnover ratio for 2019

Instruction c:

To determine

Asset turnover ratio: Asset turnover ratio is used to determine the asset’s efficiency towards sales.

Formula: Asset turnover =Net revenueAverage total assets

To compute: Return on assets ratio for 2019.

Instruction d:

To determine

Rate of return on common stockholders’ equity: Rate of return on stockholders’ equity is used to determine the relationship between the net income and the average common equity that are invested in the company.

Formula: Rate of return = Net income −Preferred dividendsAverage common stockholder’s equity

To compute: Return on assets ratio for 2019.

Instruction e:

To determine

Gross profit ratio: Gross profit ratio shows the relationship between the gross profit and net sales revenue of the company. This ratio is used to cover the operating expenses in order to earn profit.

Formula: Gross Profit Ratio=Gross ProfitNet Sales × 100

To compute: Gross profit rate

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Answer 2

Question

Chapter 13, Problem 13.10E

Instruction a:

To determine

Financial Ratios: Financial ratios are the metrics used to evaluate the capabilities, profitability, and overall performance of a company.

Evaluation of profitability: In general, financial ratios are used to evaluate capabilities, profitability, and overall performance of a company. The following are the ratios that evaluate the profitability of a company:

Profit margin ratio: Profit margin ratio is used to determine the percentage of net income that is being generated per dollar of revenue or sales.

Formula: Profit Margin=Net incomeNet revenue

To compute: Profit margin ratio for 2019.

Instruction b:

To determine

Rate of return on total assets: Return on assets determines the particular company’s overall earning power.

Formula: Rate of return on assets=Net incomeAverage total assets

To compute: Asset turnover ratio for 2019

Instruction c:

To determine

Asset turnover ratio: Asset turnover ratio is used to determine the asset’s efficiency towards sales.

Formula: Asset turnover =Net revenueAverage total assets

To compute: Return on assets ratio for 2019.

Instruction d:

To determine

Rate of return on common stockholders’ equity: Rate of return on stockholders’ equity is used to determine the relationship between the net income and the average common equity that are invested in the company.

Formula: Rate of return = Net income −Preferred dividendsAverage common stockholder’s equity

To compute: Return on assets ratio for 2019.

Instruction e:

To determine

Gross profit ratio: Gross profit ratio shows the relationship between the gross profit and net sales revenue of the company. This ratio is used to cover the operating expenses in order to earn profit.

Formula: Gross Profit Ratio=Gross ProfitNet Sales × 100

To compute: Gross profit rate

Expert Solution & Answer

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Answer 3

Question

Chapter 13, Problem 13.10E

Instruction a:

To determine

Financial Ratios: Financial ratios are the metrics used to evaluate the capabilities, profitability, and overall performance of a company.

Evaluation of profitability: In general, financial ratios are used to evaluate capabilities, profitability, and overall performance of a company. The following are the ratios that evaluate the profitability of a company:

Profit margin ratio: Profit margin ratio is used to determine the percentage of net income that is being generated per dollar of revenue or sales.

Formula: Profit Margin=Net incomeNet revenue

To compute: Profit margin ratio for 2019.

Instruction b:

To determine

Rate of return on total assets: Return on assets determines the particular company’s overall earning power.

Formula: Rate of return on assets=Net incomeAverage total assets

To compute: Asset turnover ratio for 2019

Instruction c:

To determine

Asset turnover ratio: Asset turnover ratio is used to determine the asset’s efficiency towards sales.

Formula: Asset turnover =Net revenueAverage total assets

To compute: Return on assets ratio for 2019.

Instruction d:

To determine

Rate of return on common stockholders’ equity: Rate of return on stockholders’ equity is used to determine the relationship between the net income and the average common equity that are invested in the company.

Formula: Rate of return = Net income −Preferred dividendsAverage common stockholder’s equity

To compute: Return on assets ratio for 2019.

Instruction e:

To determine

Gross profit ratio: Gross profit ratio shows the relationship between the gross profit and net sales revenue of the company. This ratio is used to cover the operating expenses in order to earn profit.

Formula: Gross Profit Ratio=Gross ProfitNet Sales × 100

To compute: Gross profit rate

Expert Solution & Answer

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See solution

Answer 4

Question

Chapter 13, Problem 13.10E

Instruction a:

To determine

Financial Ratios: Financial ratios are the metrics used to evaluate the capabilities, profitability, and overall performance of a company.

Evaluation of profitability: In general, financial ratios are used to evaluate capabilities, profitability, and overall performance of a company. The following are the ratios that evaluate the profitability of a company:

Profit margin ratio: Profit margin ratio is used to determine the percentage of net income that is being generated per dollar of revenue or sales.

Formula: Profit Margin=Net incomeNet revenue

To compute: Profit margin ratio for 2019.

Instruction b:

To determine

Rate of return on total assets: Return on assets determines the particular company’s overall earning power.

Formula: Rate of return on assets=Net incomeAverage total assets

To compute: Asset turnover ratio for 2019

Instruction c:

To determine

Asset turnover ratio: Asset turnover ratio is used to determine the asset’s efficiency towards sales.

Formula: Asset turnover =Net revenueAverage total assets

To compute: Return on assets ratio for 2019.

Instruction d:

To determine

Rate of return on common stockholders’ equity: Rate of return on stockholders’ equity is used to determine the relationship between the net income and the average common equity that are invested in the company.

Formula: Rate of return = Net income −Preferred dividendsAverage common stockholder’s equity

To compute: Return on assets ratio for 2019.

Instruction e:

To determine

Gross profit ratio: Gross profit ratio shows the relationship between the gross profit and net sales revenue of the company. This ratio is used to cover the operating expenses in order to earn profit.

Formula: Gross Profit Ratio=Gross ProfitNet Sales × 100

To compute: Gross profit rate

Expert Solution & Answer

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See solution

Answer 5

Chapter 13, Problem 13.10E

Instruction a:

To determine

Financial Ratios: Financial ratios are the metrics used to evaluate the capabilities, profitability, and overall performance of a company.

Evaluation of profitability: In general, financial ratios are used to evaluate capabilities, profitability, and overall performance of a company. The following are the ratios that evaluate the profitability of a company:

Profit margin ratio: Profit margin ratio is used to determine the percentage of net income that is being generated per dollar of revenue or sales.

Formula: Profit Margin=Net incomeNet revenue

To compute: Profit margin ratio for 2019.

Instruction b:

To determine

Rate of return on total assets: Return on assets determines the particular company’s overall earning power.

Formula: Rate of return on assets=Net incomeAverage total assets

To compute: Asset turnover ratio for 2019

Instruction c:

To determine

Asset turnover ratio: Asset turnover ratio is used to determine the asset’s efficiency towards sales.

Formula: Asset turnover =Net revenueAverage total assets

To compute: Return on assets ratio for 2019.

Instruction d:

To determine

Rate of return on common stockholders’ equity: Rate of return on stockholders’ equity is used to determine the relationship between the net income and the average common equity that are invested in the company.

Formula: Rate of return = Net income −Preferred dividendsAverage common stockholder’s equity

To compute: Return on assets ratio for 2019.

Instruction e:

To determine

Gross profit ratio: Gross profit ratio shows the relationship between the gross profit and net sales revenue of the company. This ratio is used to cover the operating expenses in order to earn profit.

Formula: Gross Profit Ratio=Gross ProfitNet Sales × 100

To compute: Gross profit rate

Answer 6

Chapter 13, Problem 13.10E

Instruction a:

To determine

Financial Ratios: Financial ratios are the metrics used to evaluate the capabilities, profitability, and overall performance of a company.

Evaluation of profitability: In general, financial ratios are used to evaluate capabilities, profitability, and overall performance of a company. The following are the ratios that evaluate the profitability of a company:

Profit margin ratio: Profit margin ratio is used to determine the percentage of net income that is being generated per dollar of revenue or sales.

Formula: Profit Margin=Net incomeNet revenue

To compute: Profit margin ratio for 2019.

Answer 7

Chapter 13, Problem 13.10E

Instruction a:

To determine

Financial Ratios: Financial ratios are the metrics used to evaluate the capabilities, profitability, and overall performance of a company.

Evaluation of profitability: In general, financial ratios are used to evaluate capabilities, profitability, and overall performance of a company. The following are the ratios that evaluate the profitability of a company:

Profit margin ratio: Profit margin ratio is used to determine the percentage of net income that is being generated per dollar of revenue or sales.

Formula: Profit Margin=Net incomeNet revenue

To compute: Profit margin ratio for 2019.

Answer 8

Instruction b:

To determine

Rate of return on total assets: Return on assets determines the particular company’s overall earning power.

Formula: Rate of return on assets=Net incomeAverage total assets

To compute: Asset turnover ratio for 2019

Answer 9

Instruction b:

To determine

Rate of return on total assets: Return on assets determines the particular company’s overall earning power.

Formula: Rate of return on assets=Net incomeAverage total assets

To compute: Asset turnover ratio for 2019

Answer 10

Instruction c:

To determine

Asset turnover ratio: Asset turnover ratio is used to determine the asset’s efficiency towards sales.

Formula: Asset turnover =Net revenueAverage total assets

To compute: Return on assets ratio for 2019.

Answer 11

Instruction c:

To determine

Asset turnover ratio: Asset turnover ratio is used to determine the asset’s efficiency towards sales.

Formula: Asset turnover =Net revenueAverage total assets

To compute: Return on assets ratio for 2019.

Answer 12

Instruction d:

To determine

Rate of return on common stockholders’ equity: Rate of return on stockholders’ equity is used to determine the relationship between the net income and the average common equity that are invested in the company.

Formula: Rate of return = Net income −Preferred dividendsAverage common stockholder’s equity

To compute: Return on assets ratio for 2019.

Answer 13

Instruction d:

To determine

Rate of return on common stockholders’ equity: Rate of return on stockholders’ equity is used to determine the relationship between the net income and the average common equity that are invested in the company.

Formula: Rate of return = Net income −Preferred dividendsAverage common stockholder’s equity

To compute: Return on assets ratio for 2019.

Answer 14

Instruction e:

To determine

Gross profit ratio: Gross profit ratio shows the relationship between the gross profit and net sales revenue of the company. This ratio is used to cover the operating expenses in order to earn profit.

Formula: Gross Profit Ratio=Gross ProfitNet Sales × 100

To compute: Gross profit rate

Answer 15

Instruction e:

To determine

Gross profit ratio: Gross profit ratio shows the relationship between the gross profit and net sales revenue of the company. This ratio is used to cover the operating expenses in order to earn profit.

Formula: Gross Profit Ratio=Gross ProfitNet Sales × 100

To compute: Gross profit rate

Answer 16

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Answer 17

Expert Solution & Answer

Answer 18

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Answer 19

Ch. 13 - Prob. 1Q Ch. 13 - Prob. 2Q Ch. 13 - Prob. 3Q Ch. 13 - Prob. 4Q Ch. 13 - Prob. 5Q Ch. 13 - Prob. 6Q Ch. 13 - Prob. 7Q Ch. 13 - Prob. 8Q Ch. 13 - Prob. 9Q Ch. 13 - 10. (a) Distinguish among the following bases of...

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Rate of return on total assets: Return on assets determines the particular company’s overall earning power.

Formula: Rate of return on assets=Net incomeAverage total assets

To compute: Asset turnover ratio for 2019

Asset turnover ratio: Asset turnover ratio is used to determine the asset’s efficiency towards sales.

Formula: Asset turnover =Net revenueAverage total assets

To compute: Return on assets ratio for 2019.

Gross profit ratio: Gross profit ratio shows the relationship between the gross profit and net sales revenue of the company. This ratio is used to cover the operating expenses in order to earn profit.

Formula: Gross Profit Ratio=Gross ProfitNet Sales × 100

To compute: Gross profit rate

Want to see the full answer?

Chapter 13 Solutions

Videos

Rate of return on total assets: Return on assets determines the particular company’s overall earning power. Formula: Rate of return on assets=Net incomeAverage total assets To compute: Asset turnover ratio for 2019

Asset turnover ratio: Asset turnover ratio is used to determine the asset’s efficiency towards sales. Formula: Asset turnover =Net revenueAverage total assets To compute: Return on assets ratio for 2019.

Gross profit ratio: Gross profit ratio shows the relationship between the gross profit and net sales revenue of the company. This ratio is used to cover the operating expenses in order to earn profit. Formula: Gross Profit Ratio=Gross ProfitNet Sales × 100 To compute: Gross profit rate

Want to see the full answer?

Chapter 13 Solutions

Rate of return on total assets: Return on assets determines the particular company’s overall earning power.

Formula: Rate of return on assets=Net incomeAverage total assets

To compute: Asset turnover ratio for 2019

Asset turnover ratio: Asset turnover ratio is used to determine the asset’s efficiency towards sales.

Formula: Asset turnover =Net revenueAverage total assets

To compute: Return on assets ratio for 2019.

Gross profit ratio: Gross profit ratio shows the relationship between the gross profit and net sales revenue of the company. This ratio is used to cover the operating expenses in order to earn profit.

Formula: Gross Profit Ratio=Gross ProfitNet Sales × 100

To compute: Gross profit rate