The Following Condensed Income Statement Is for Mason Inc

question 18

Essay

The following condensed income statement is for Mason Inc.


Compute the following ratios for 2013,and provide a brief explanation after each ratio (round percentage computations to one decimal place and earnings per share to two decimal places):
(1)Gross margin ratio
(2)Profit margin ratio
(3)Return on assets
(4)Return on common shareholders' equity
(5)Earnings per share (assume weighted average shares outstanding totaled 2,900,000 shares)
(6)Market capitalization (assume 3,000,000 shares were issued and outstanding at December 31,2013,and the market price was $9.00 per share)
(7)Price-earnings ratio

Identify the role of market price in a competitive price-taker firm's decision-making process regarding output levels.

Understand the concept of price being driven to minimum average total cost in competitive markets due to characteristics like free entry and exit.

Analyze how changes in a firm's output level affect its profitability in a competitive market.

Recognize the implications of a firm producing at a level where marginal cost exceeds or is less than marginal revenue.

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Definitions:

Polycystic Ovary Syndrome

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Turner Syndrome

A chromosomal disorder in females that results from a complete or partial absence of one of the two X chromosomes, causing various developmental issues.

Cognitive Behavioral Therapy

A psychotherapeutic approach that aims to change negative thoughts and behaviors by focusing on solutions, encouraging a change in negative thinking patterns and behavioral responses.

Premenstrual Dysphoric Disorder

A severe form of premenstrual syndrome (PMS) characterized by significant mood disturbances and physical symptoms.