Financial Ratios
Answer each of the following independent questions:
a. The return on equity for the Hammond Corporation for the year ended December 31, 1999, is 9%. The owners’ equity balances on December 31, 1998 and 1999 were $180,000 and $200,000, respectively. What is the net income for 1999?
b. The Beachfront Resort Company had the following income statement information:
|
Sales revenue |
$500,000 |
|
Gross profit percentage |
30% |
|
Net income percentage |
5% |
What is the cost of goods sold? What is the total operating and other expenses?
c. The return on assets for the Wicker Chair Company is 12%. The average total assets is $230,000 and net income is $20,100. What is interest expense, net of tax? What is gross interest expense if the income tax rate is 25%?