If current assets are $45,000 and total assets are $270,000, what percentage of total assets are current assets?
If current assets are $45,000 and total assets are $270,000, what percentage of total assets are current assets?
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The financial statements for Castile Products, Inc., are givenbelow: |
| Castile Products, Inc. Balance Sheet December 31 | ||||||
| Assets | ||||||
| Current assets: | ||||||
| Cash | $ | 19,000 | ||||
| Accounts receivable, net | 200,000 | |||||
| Merchandise inventory | 350,000 | |||||
| Prepaid expenses | 12,000 | |||||
| Total currentassets | 581,000 | |||||
| Property andequipment, net | 860,000 | |||||
| Total assets | $ | 1,441,000 | ||||
| Liabilitiesand Stockholders' Equity | ||||||
| Liabilities: | ||||||
| Current liabilities | $ | 290,000 | ||||
| Bonds payable, 11% | 320,000 | |||||
| Totalliabilities | 610,000 | |||||
| Stockholdersâequity: | ||||||
| Common stock, $5 par value | $ | 120,000 | ||||
| Retained earnings | 711,000 | |||||
| Total stockholdersâequity | 831,000 | |||||
| Total liabilitiesand stockholders' equity | $ | 1,441,000 | ||||
| Castile Products, Inc. Income Statement For the Year Ended December 31 | |||
| Sales | $ | 2,170,000 | |
| Cost of goodssold | 1,180,000 | ||
| Gross margin | 990,000 | ||
| Selling andadministrative expenses | 580,000 | ||
| Net operatingincome | 410,000 | ||
| Interestexpense | 35,200 | ||
| Net income beforetaxes | 374,800 | ||
| Income taxes(30%) | 112,440 | ||
| Net income | $ | 262,360 | |
Account balances at the beginningof the year were: accounts receivable, $240,000; and inventory,$270,000. All sales were on account. Assets at the beginning of theyear totaled $1,090,000, and the stockholdersâ equity totaled$645,000. |
| Required: |
| Compute the following: |
| 1. | Gross margin percentage. (Round your percentage answerto 2 decimal places (i.e., 0.1234 should be entered as12.34).) |
| 2. | Net profit margin percentage. (Round your answer to thenearest whole percentage place (i.e., 0.1234 should be entered as12%).) |
| 3. | Return on total assets. (Round your percentage answer to1 decimal place (i.e., 0.1234 should be entered as12.3).) |
| 4. | Return on equity. (Round your percentage answer to 1decimal place (i.e., 0.1234 should be entered as12.3).) |
| 5. | Was financial leverage positiveor negative for the year? | ||||
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