The Following Amounts Were Taken from the Financial Statements of Ando

question 286

Multiple Choice

The following amounts were taken from the financial statements of Ando Company: $\begin{array}{lrr}&2014&2013\\\text { Total assets } & \$ 800,000 & \$ 1,000,000 \\\text { Net sales } & 720,000 & 650,000 \\\text { Gross profit } & 352,000 & 320,000 \\\text { Net income } & 144,000 & 11,000 \\\text { Weighted average number of } & &\\\text { common shares outstanding }&90,000 & 90,000 \\\text { Market price of common stock }&\$ 35 & \$ 39\end{array}$ The profit margin ratio for 2014 is

• A) 20.6%.
• B) 21.0%.
• C) 20%.
• D) 40.9%.

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Definitions:

Reporting Period

The specific span of time covered by financial statements, typically a fiscal quarter or year, over which a company reports its financial performance.

Footnotes

Additional notes provided in financial statements offering more detailed information about the accounts and policies applied.

Limitations

Restrictions or constraints that affect the scope, effectiveness, or applicability of something.

Balance Sheet

A business's financial report that lists its holdings, obligations, and the value belonging to its shareholders at a specific time.