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Gross Margin to total sales

Please answer the questions on the sheet provided. I have attached the balance sheet and income statement.

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1. Refer to the financial statements to answer the following questions. Work all problems out on this page. Show work.

How profitable was ABC Company when comparing their Gross Margin to total sales?

How profitable was ABC Company when comparing their Net Income to total sales?

What was ABC Company's Earnings Per Share?

What was ABC Company's Price to Earnings Ratio on 12/31/04?

What was ABC Company's EBIT (Earnings Before Interest and Taxes)?

What was ABC Company's Current Ratio?

What was ABC Company's Acid Test Ratio?

What percentage of ABC Company's Assets are financed by debt?

What percentage of ABC Company's Assets are fully paid for?

What was ABC Company's Return on Equity?

2. True / False (20% of grade)

______ A correlation coefficient is a measure of relationship between two securities.

______ Standard Deviation is calculated by taking the future values of present values.

______ A beta of 1.8 is less risky than the market.

______ A statement of cash flows is dated on one specific day.

______ The current ratio is an indication of a company's solvency.

______ "Firm specific" or "individual company" risk can also be called "unsystematic risk."

______ The lower the standard deviation, the lower the risk.

______ The direct method of preparing a statement of Cash Flows begins with Net Income as the first entry.

______ The beta of a stock is basically the slope of a line when comparing the stock with the market.

______ Systematic risk can be diversified away.

3. How many microwave ovens will the following manufacturing company need to sell in order to make a profit of $300,000 this year? (20 percent of grade)
Yearly Fixed Costs: $400,000
Cost to make each microwave oven: $85
Selling cost of microwave oven: $199

4. Refer to the XYZ Stocks price data below:

Jan. 1, 2001 $10.00
Jan. 1, 2002 $6.00
Jan. 1, 2003 $9.00
Jan. 1, 2004 $13.50

What are XYZ's three holding period returns?

HPR 1 =

HPR 2 =

HPR 3 =

What is XYZ's average return?

What is XYZ's Geometric Mean Return?
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Solution Preview

Please answer the questions on the sheet provided. I have attached the balance sheet and income statement.

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1. Refer ...

Solution Summary

This provides the steps to calculate the Gross Margin to total sales

$2.19