The following are extracted from the financial statements of Shawn Co., for 2019, 2018, and2017.2019$233,0002018$204,000(110,000)(81,500)2017Net salesCost of sales(124,000)(95,000)Selling and administrative expensesOther income:(3,700)(3,050)1,175$ 10,625(4,740)5,8851,510$ 7,395InterestOther100Earnings before tax and extraordinary creditProvision for income taxEarnings before extraordinary creditExtraordinary credit$ 10,400(4,800)5,600$ 5,600Total assets$202,00024,600$173,000$161,000Long-term debtCommon equityPreferred stockPreferred dividends17,40015,200112,800123,0004,000280116,8004,0004,000280280Required:Compute the following ratios for Shawn Co. for 2019 and 2018.Net profit margin1.2.Total asset turnover3.Return on assets4.Return on investmentReturn on total equityReturn on common equityGross profit margin5.6.7.Discuss the trend in profitability and identify specific causes for the trend.

Ratio Analysis: Ratio analysis is a system of analysis or comparison of the ratio of the company…

The following are extracted from the financial statements of Shawn Co., for 2019, 2018, and 2017. 2019 $233,000 (124,000) (95,000) 2018 $204,000 (110,000) (81,500) 2017 Net sales Cost of sales Selling and administrative expenses Other income: (3,700) 100 S 10,400 (4,800) 5,600 Interest (3,050) 1,175 Other Earnings before tax and extraordinary credit Provision for income tax S 10,625 (4,740) 5,885 1,510 $ 7,395 Earnings before extraordinary credit Extraordinary credit $ 5,600 Total assets $202,000 $173,000 17,400 S161,000 15,200 Long-term debt Common equity Preferred stock Preferred dividends 24,600 112,800 123,000 4,000 116,800 4,000 4,000 280 280 280 Required: Compute the following ratios for Shawn Co. for 2019 and 2018. Net profit margin Total asset turnover 1. 2. 3. Return on assets 4. Return on investment

The following are extracted from the financial statements of Shawn Co., for 2019, 2018, and 2017. 2019 $233,000 (124,000) (95,000) 2018 $204,000 (110,000) (81,500) 2017 Net sales Cost of sales Selling and administrative expenses Other income: (3,700) 100 S 10,400 (4,800) 5,600 Interest (3,050) 1,175 Other Earnings before tax and extraordinary credit Provision for income tax S 10,625 (4,740) 5,885 1,510 $ 7,395 Earnings before extraordinary credit Extraordinary credit $ 5,600 Total assets $202,000 $173,000 17,400 S161,000 15,200 Long-term debt Common equity Preferred stock Preferred dividends 24,600 112,800 123,000 4,000 116,800 4,000 4,000 280 280 280 Required: Compute the following ratios for Shawn Co. for 2019 and 2018. Net profit margin Total asset turnover 1. 2. 3. Return on assets 4. Return on investment

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following are extracted from the financial statements of Shawn Co., for 2019, 2018, and 2017. 2019 2018 2017 Net sales $233,000 (124,000) (95,000) $204,000 Cost of sales (110,000) (81,500) Selling and administrative expenses Other income: Interest Other (3,700) (3,050) 1,175 $ 10,625 100 Earnings before tax and extraordinary credit Provision for income tax $ 10,400 (4,800) 5,600 (4,740) Earnings before extraordinary credit Extraordinary credit 5,885 1,510 $ 7,395 $ 5,600 Total assets $202,000 $173,000 17,400 116,800 4,000 280 $161,000 Long-term debt Common equity 24,600 123,000 15,200 112,800 4,000 280 Preferred stock 4,000 Preferred dividends 280 Required: Compute the following ratios for Shawn Co. for 2019 and 2018. 1. Return on total equity Return on common equity Gross profit margin 2. 3. b. Discuss the trend in profitability and identify specific causes for the trend.
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