Gross Margin percentage: Gross margin measures the profitability of a company by comparing the gross profit and the sales revenue of the company. Net Profit Margin percentage: It the net profit of a company expressed in percentage over its sales revenue during a particular period. Return on Total Assets: A return on total assets measures a company’s ability in generating earnings before interest and tax by utilizing the total assets of the company. Return on Equity: Return on equity is a profitability ratio which shows how much profit has been generated on the funds invested by the stockholders of the company. Computation of financial data for this year: 1. Gross Margin percentage 2. Net Profit Margin percentage 3. Return on Total Assets. 4. Return on Equity

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Chapter 14, Problem 5E

To determine

Gross Margin percentage:

Gross margin measures the profitability of a company by comparing the gross profit and the sales revenue of the company.

Net Profit Margin percentage:

It the net profit of a company expressed in percentage over its sales revenue during a particular period.

Return on Total Assets:

A return on total assets measures a company’s ability in generating earnings before interest and tax by utilizing the total assets of the company.

Return on Equity:

Return on equity is a profitability ratio which shows how much profit has been generated on the funds invested by the stockholders of the company.

Computation of financial data for this year:

1. Gross Margin percentage

2. Net Profit Margin percentage

3. Return on Total Assets.

4. Return on Equity

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