Solution-Compute the return on assets and profit margin

Compute the return on assets and profit margin

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Reference no: EM131743727

Problem - The condensed financial statements of Sandhill Co. for the years 2016 and 2017 are presented as follows. (Amounts in thousands.)

SANDHILL CO. Balance Sheets December 31
	2017	2016
Current assets
Cash and cash equivalents	$330	$360
Accounts receivable (net)	500	430
Inventory	660	590
Prepaid expenses	120	160
Total current assets	1,610	1,540
Investments	40	40
Property, plant, and equipment (net)	420	380
Intangibles and other assets	530	510
Total assets	$2,600	$2,470
Current liabilities	$930	$820
Long-term liabilities	610	580
Stockholders' equity-common	1,060	1,070
Total liabilities and stockholders' equity	$2,600	$2,470

SANDHILL CO. Income Statements For the Year Ended December 31
	2017	2016
Sales revenue	$4,000	$3,660
Costs and expenses
Cost of goods sold	985	920
Selling & administrative expenses	2,400	2,330
Interest expense	25	20
Total costs and expenses	3,410	3,270
Income before income taxes	590	390
Income tax expense	177	117
Net income	$ 413	$ 273

Compute the following ratios for 2017 and 2016.

(a) Current ratio.

(b) Inventory turnover. (Inventory on 12/31/15, was $440.)

(d) Return on assets. (Assets on 12/31/15, were $2,670.)

(e) Return on common stockholders' equity. (Stockholders' equity on 12/31/15, was $990.)

(f) Debt to assets ratio.

(g) Times interest earned.

Reference no: EM131743727

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Compute the return on assets and profit margin

Reference no: EM131743727

Reference no: EM131743727

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