Ratio Calculation
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(See attached file for full problem description)
P 8-5
Required :
a. Calculate the following for 2004 and 2003
1) Net profit margin
2)Return on assets (using ending assets)
3) Total assets turnover (using ending assets)
4) Dupont analysis
5) Operating income margin
6) Return on operating assets ( using ending assets)
7) Operating asset turnover (using ending assets)
8) Dupont analysis with operating ratios
9) Rteurn on investment (using ending liabilities and equity)
10) Return on equity (using ending common equity)
b) Based on the previous computations, summarize the trend in profitability for this firm
ABC Corporation
Statement of Earnings
Years Ended December 31, 2003 2004
2004 2003
Net Sales $1,589,150 $1,294,966
Other Income 22,334 20,822
Gross Profit 1,611,484 1,315,788
Costs and expenses:
Material and manufacturing costs of products sold 651,390 466,250
Research and development 135,314 113,100
General and selling 526,680 446,110
Interest 18,768 11,522
Other 15,570 7,306
1,347,722 1,044,288
Earnings before income taxes and minority equity 263,762 271,500
Provision for income taxes 114,502 121,740
Earnings before minority equity 149,260 149,760
Minority equity in earnings 11,056 12,650
Net earnings 138,204 137,110
Average common shares issued 29,580 29,480
Total long-term debt $209,128 $212,702
Total stockholders' equity (all common) 810,292 720,530
Total assets 1,437,636 1,182,110
Operating assets 1,411,686 1,159,666
Dividends per share 1.96 1.86
Stock price (December 31) 53 3/4 76 1/8
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Solution Summary
The solution explains the calculation of various ratios.
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