23 Jul DO YOU THINK THE COMPANY IS MORE PROFITABLE OR LESS PROFITABLE THAN THE INDUSTRY AVERAGES?
The 2012 income statement of Adrian Express reports sales of $12 million cost of goods sold of $9.6 Show more The 2012 income statement of Adrian Express reports sales of $12 million cost of goods sold of $9.6 million and net income of $1.0 million. Balance sheet information is provided in the following table. All amounts are in thousands. ADRIAN EXPRESS Balance Sheet December 31 2012 and 2011 ($ in 000s) 2012 2011 Assets Current assets: Cash $ 620 $ 780 Accounts receivable 1640 1240 Inventory 2100 1700 Long-term assets 4900 4300 Total assets $ 9260 $ 8020 Liabilities and Stockholders Equity Current liabilities $ 2080 $ 1720 Long-term liabilities 1800 1900 Common stock 2000 2000 Retained earnings 3380 2400 Total liabilities and stockholders equity $ 9260 $ 8020 Industry averages for the following four risk ratios are as follows: Gross profit ratio 26 % Return on assets 18 % Profit margin 12 % Asset turnover 2 times Return on equity 16 % 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.) Profitability Ratios Gross profit ratio % Return on assets % Profit margin % Asset turnover times Return on equity % 2. Do you think the company is more profitable or less profitable than the industry averages? (Click to select) More profitable Less profitable Show less
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