Test Problem Ch 5 through 8 3-31-10

Test Problem Ch 5 through 8 3-31-10 - 123,000 116,800...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
The following are extracted from the financial statements of Frem, Inc., for 2008, 2007, and 2006. Fifteen Points. 2008 2007 2006 Net sales $233,000 $204,000 Cost of sales (124,000) (110,000) Selling and administrative expenses (95,000) (81,500) Other income: Interest (3,700) (3,050) Other 100 1,175 Earnings before tax and extraordinary credit $ 10,400 $ 10,625 Provision for income tax (4,800) (4,740) Earnings before extraordinary credit 5,600 5,885 Extraordinary credit 1,510 $ 5,600 $ 7,395 Total assets $202,000 $173,000 $161,000 Long-term debt 24,600 17,400 15,200 Common equity
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 123,000 116,800 112,800 Preferred stock 4,000 4,000 4,000 Preferred dividends 280 280 280 Required: a. Compute the following ratios for 2008 and 2007. Show all work 1. Net profit margin 2.40% 2.88% 2. Total asset turnover 1.24 times 1.22 times 3. Return on assets 2.99% 3.52% 4. Return on investment 5.24% 5.61% 5. Return on total equity 4.52% 4.95% 6. Return on common equity 4.44% 4.88% 7. Gross profit margin 46.78% 46.08% b. Discuss the trend in profitability and identify specific causes for the trend....
View Full Document

Ask a homework question - tutors are online