Determine fultons sales-cost of goods sold-gross profit

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Reference no: EM13336014

Liz Marett is the chief financial officer for Fulton Construction. She delivered the following comments in a recent conference call with analysts that follow the company: "20X5 was another excellent year. Net income was a record setting $10,000,000. We maintained our overall net profit on sales at the historic 10% level. This occurred despite an increase in raw material costs that lowered our gross margin to 60%. We are proud that we continue to maintain a healthy balance sheet that is free of any liablities. All of our financing continues to be provided by our common and preferred shareholders. Our beginning of year equity of $75,000,000 was sufficient to fund our capital needs, and no additional shares were issued this year. Our "5% preferred shareholders" have again received their full $2,000,000 in dividends for the year. The remaining earnings have been reinvested in the company."

(a) Use profitability ratios to determine Fulton's sales, cost of goods sold, gross profit, and net income.

(b) Calculate Futlon's return on assets and return on equity. Which is higher, and why?

Reference no: EM13336014

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