Maggie’s Skunk Removal Corp.’s 2021 income statement listed net sales of $12.6 million, gross profit of...

Maggie’s Skunk Removal Corp.’s 2021 income statement listed net sales of $12.6 million, gross profit of $7.10 million, EBIT of $5.7 million, net income available to common stockholders of $3.3 million, and common stock dividends of $1.3 million. The 2021 year-end balance sheet listed total assets of $52.6 million and common stockholders' equity of $21.1 million with 2.0 million shares outstanding. Calculate the gross profit margin. (Round your answer to 2 decimal places.) Calculate the operating profit margin. (Round your answer to 2 decimal places.) Calculate the profit margin. (Round your answer to 2 decimal places.) Calculate the basic earnings power. (Round your answer to 2 decimal places.) Calculate the return on assets. (Round your answer to 2 decimal places.) Calculate the return on equity. (Round your answer to 2 decimal places.) Calculate the dividend payout. (Round your answer to 2 decimal places.)

Expert Solution

Income statement 2021	Amount in $ million	Workings
Net Sales	12.6
Gross profit	7.1
EBIT	5.7
Net income available to common stock holders	3.3
common stock dividend	1.3

Balance sheet	2021
Total assets	52.6
common stockholders equity	21.1
shares outstanding	2

Ratio Calculations
Gross profit margin=Gross profit/sales	0.56	(7.1/12.6)
Operating profit margin=operating profit/sales	0.45	(5.7/12.6)
Profit Margin=Net income/sales	0.26	(3.3/12.6)
Basic Earnings Power=EBIT/Total assets	0.11	(5.7/52.6)
Return on total assets=Net income/total assets	0.06	(3.3/52.6)
Return on equity=Net income/stockholder equity	0.16	(3.3/21.1)
Dividend payout=dividend per share/earnings per share	0.39	(0.65/1.65)

Dividend per share=	0.65	(1.32/2)
Earnings per share=	1.65	(3.3/2)

jeff jeffy answered 3 years ago

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