Accounting 2 Chapter 16: Sales, Costs of Goods Sold, and Net

School: Charleston Southern University - Course: ACCT 2 - Subject: Accounting

Accounting 2 Chapter 16 HW 16-1 Sales............8,000,000-6,000,000=2,000,00033 percent Costs of good sold..........4984000-3516000= 1468000.42 percent Gross margin...................3016000-2484000= 53200021 percent Selling expenses...........14800000-1092000= 38800036 percent Administrative expenses712000-618000= 9400015 percent Total expenses..........2192000-1710000= 48200028 percent Net operating income...824000-774000=500006 percent Interest expense....96000-84000=1200014 percent Net Income before taxes..728000-690000=3800055 percent The company had a 55 percent change in net income before taxes, they also had a 42 percent change in costs of goods sold, which could correlate to the 55 percent change in the net incomes before taxes tab. 16-2 Working Capital= Current assets-current liabilities 50280-10400= 39880 Current Ratio=Current assets/current liabilities 50280/10499= 4.83 Quick Ratio= quick assets/current liabilities

1280+12300/10499= 1.3 16-3 Accounts receivable turnover: 79,000/10700= 7.4 Average Collection Period: 365/7.4= 49.3 Inventory Turnover: 52000/8950= 5.81 Average Sale Period: 365/5.81= 62.9 Operating Cycle: 62.9+49.3= 112.2 Total asset turnover: 79000/48120= 1.64 16-4 Times interest earned ratio: 6500/600= 10.9 Debt to equity ratio: 15400/34880= 44 Equity Multiplier: 48120/33240= 1.45 16-5 Gross margin percentage: 27000/79000= 34 percent Net profit margin percentage: 3540/79000= 4.48 percent Return on Total assets Return on equity: 3540/33270= 10.64 percent 16-6 Earnings per share: 3540/800= 4.425 Price-earnings ratio:/4.425