Question

1. Record the accounts balances from the year-end financial statements:

Can somebody show me how to figure out the ratios for company 1

Income Statement Identify Rounding: millions or thousands	Company #1 Ford		Company #2 GM
For the year ended	2018	2017	2018	2017
Revenues	148,294,000	145,653,000
COGS	136,269,000	131,321,000
Net Income	3,695,000	7,757,000
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***

Balance Sheet Identify Rounding: millions or thousands	Company #1		Company #2
For the year ended	2018	2017	2018	2017
Total Assets	256,540,000	$258,496,000
Current Liabilities	95,569,000	94,600,000
Long-term debt	102,666,000	100,720,000
Other long-term liabilities	25,526,600	24,185,000
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***
Stockholders’ Equity	256,540,000	258,496,000

2. Compute ratios. Round numbers to one decimal place.

Ratios	Company #1		Company #2
Year	2018	2017
Gross Profit Margin
Net Profit Margin
Total Asset Turnover
Return on Total Assets
Return on Common Equity

Answer 1

Answer of Part a:

For 2018:

Gross Profit = Sales –COGS
Gross Profit = $148,294,000 - $136,269,000
Gross Profit = $12,025,000

Gross Profit Ratio = Gross Profit / Sales *100
Gross Profit Ratio = $12,025,000 / $148,294,000 *100
Gross Profit Ratio = 8.11%

For 2017:

Gross Profit = Sales –COGS
Gross Profit = $145,653,000 - $131,321,000
Gross Profit = $14,332,000

Gross Profit Ratio = Gross Profit / Sales *100
Gross Profit Ratio = $14,332,000 / $145,653,000*100
Gross Profit Ratio = 9.84%

Answer of Part b:

For 2018:

Net Profit Margin = Net Income / Sales *100
Net Profit Margin = $3,695,000 / $148,294,000 *100
Net Profit Margin = 2.49%

For 2017:

Net Profit Margin = Net Income / Sales *100
Net Profit Margin = $7,757,000 / $145,653,000 *100
Net Profit Margin = 5.33%

Answer of Part c:

For 2018:

Total Asset Turnover = Sales / Total Assets
Total Asset Turnover = $148,294,000 / $256,540,000
Total Asset Turnover = 0.58

For 2017:

Total Asset Turnover = Sales / Total Assets
Total Asset Turnover = $145,653,000 / $258,496,000
Total Asset Turnover = 0.56

Answer of Part d:

For 2018:

Return on Total Assets = Net Income / Total Assets *100
Return on Total Assets = $3,695,000 / $256,540,000 *100
Return on Total Assets = 1.44%

For 2017:

Return on Total Assets = Net Income / Total Assets *100
Return on Total Assets = $7,757,000 / $258,496,000 *100
Return on Total Assets = 3.00%