Information is provided below for two companies that produce and sell plastic containers.
|
Caseopia |
Dragoon |
|||
|
(In thousands) |
2004 |
2003 |
2004 |
2003 |
|
Sales revenues |
$750 |
$700 |
$320 |
$300 |
|
Cost of goods sold |
450 |
420 |
208 |
180 |
|
Gross profit |
300 |
280 |
112 |
120 |
|
Operating expenses |
120 |
135 |
50 |
43 |
|
Operating income |
180 |
145 |
62 |
77 |
|
Net income |
100 |
87 |
37 |
46 |
|
Accounts receivable |
46 |
43 |
23 |
20 |
|
Inventories |
82 |
80 |
50 |
42 |
|
Total assets |
960 |
900 |
500 |
450 |
Required
A. Compute profit margin, gross profit margin, operating profit margin, asset turnover, accounts receivable turnover, inventory turnover, and return on assets for each company.
B. Use these ratios to evaluate the operating activities of each company and to compare the companies’ performance.