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(Solution Download) The 2012 income statement of Adrian Express reports sales of $16 million, cost of goods sold of $12.


 

 

 

 

 

 

 

The 2012 income statement of Adrian Express reports sales of $16

 

million, cost of goods sold of $12.8 million, and net income of

 

$1.4 million. Balance sheet information is provided in the

 

following table. All amounts are in thousands.

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADRIAN EXPRESS

 

Balance Sheet

 

December 31, 2012 and 2011

  ($ in 000s)   2012   2011
  Assets
  Current assets:
      Cash$440  $600  
      Accounts receivable1,7201,320  
      Inventory1,900  1,500  
  Long-term assets3,800  4,380  
  
         Total

 

assets

$7,860  $7,800  
    
  Liabilities and Stockholders'

 

Equity

  Current liabilities$2,160  $1,800  
  Long-term liabilities1,900  2,000  
  Common stock2,000  2,000  
  Retained earnings1,800  2,000  
  
         Total

 

liabilities and stockholders' equity

$7,860  $7,800  
  

 

       

 

 

 

 

 

 

 

Industry averages for the following four risk ratios are as

 

follows:

 

      

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  
  Gross profit ratio25%
  Return on assets22%
  Profit margin13%
  Asset turnover2times
  Return on equity31%

 

   

 

 

 

 

 

 

 

Required:

 

 

 

 

 

 

 

 

1.

 

Calculate the five profitability ratios listed above for Adrian

 

Express. (Round your answers to 1 decimal place. Omit the %

 

sign in your response.)

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Profit margin%       
  
  Return on equity%       

 

  

 


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