Operating Profit Margin
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Income Statement
Granny's Cat Farms, Inc.
Year Ending December 31, 200X
Revenue
Gross Sales 100000
Returns 5000
Net Sales 95000
Cost of Goods Sold 40000
Gross Margin 55000
Selling General and Administrative Expenses 15000
Depreciation 1500
Rent and Utilities 12000
Indirect Labor 5700
Total expenses 34200
Earnings Before Interest and Taxes 20800
Interest Expenses 5000
Earnings Before Taxes 29200
Taxes (30%) 8760
Net Income 20440
Balance Sheet
Granny's Cat Farms
As of December 31, 200X
End of 200X Beginning of 200X
Assets
Cash 50000 47500
Marketable Securities 25000 10000
Inventories (Cat Food, supplies, etc...) 12000 10000
Other Current Assets 15000 12000
Total Current Assets 102000 79500
Net Property, Plant and Equipment 125000 120000
Other Long Term Assets 15000 15000
Total Assets 242000 214500
Liabilities and Shareholders Equity
Accounts Payable 15000 12000
Short Term Debt 50000 45000
Other Current Liabilities 12000 11000
Total Current Liabilities 77000 68000
Long Term Debt (including leases) 65000 63000
Other Long-term Liabilities 20000 18000
Shareholders Equity 80000 65500
Given these statements, compute the following 12 ratios for 200X:
a. Long Term Debt Ratio
b. Total Debt Ratio
c. Times Interest Earned
d. Cash Coverage Ratio
e. Current Ratio
f. Quick Ratio
g. Operating Profit Margin
h. Inventory Turns
I. Days in Inventory
j. Average Collection Period
k. Return on Equity
l. Return on Assets
Please assist and show work so this can be a learning experience for me. Thanks!
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Solution Summary
This provides the steps to calculate the Operating Profit Margin and other ratios
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Income Statement
Granny's Cat Farms, Inc.
Year Ending December 31, 200X
Revenue
Gross Sales 100000
Returns 5000
Net Sales 95000
Cost of Goods Sold 40000
Gross Margin 55000
Selling General and Administrative Expenses 15000
Depreciation 1500
Rent and Utilities 12000
Indirect Labor 5700
Total expenses 34200
Earnings Before Interest and ...
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