The Following Income Statement and Balance Sheets for Laser World

question 152

Essay

The following income statement and balance sheets for Laser World are provided: $$\begin{array} { | l r | } \hline { \begin{array} { c } \text { Laser World } \\\text { Income Statement } \\\text { For the year-ended December 31 , 2012}\end{array} } \\\hline \text { Sales revenue } & \$ 2,200,000 \\\text { Cost of goods sold } & 1,500,000 \\\text { Gross profit } & 700,000 \\\text { Expenses: } & \\\text { Operating expenses } & 350,000 \\\text { Depreciation expense } & 70,000 \\\text { Loss on sale of land } & 5,000 \\\text { Interest expense } & 25,000 \\\text { Income tax expense } & 60,000 \\\text { Total expenses } & 510,000 \\\hline \text { Net income } & \$ 190,000 \\\hline\end{array}$$ Earnings per share for the year-ended December 31, 2012, is $1.90. The closing stock price on December 31, 2012, is $30.40.
Calculate the following profitability ratios for 2012: $\begin{array}{ll}\text { 1. Gross profit ratio } & \text { 4. Asset turnover } \\\text { 2. Return on assets } & \text { 5. Return on equity } \\\text { 3. Profit margin } & \text { 6. Price-earnings ratio }\end{array}$

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Definitions:

Stem

In the context of a stem-and-leaf plot, it represents the leading digit(s) in a group of numbers which are used to organize and display data graphically.

Histogram

A graphical representation of the distribution of numerical data, where the data are binned and the count for each bin is represented by the height of the bar.

Class Size

The number of students enrolled in a given class or course, often influencing the effectiveness of teaching and learning.

Distribution Tails

The regions at either end of a probability distribution, often of interest for understanding the likelihood of extreme outcomes.