Analysis of Profitability Compute the following profitabilit

Analysis of Profitability

Compute the following profitability measures for 20-2 (round all calculations to two decimal places):

Analysis of Profitability

Based on the financial statements of Cowan Kitchen Counters, Inc., as shown below:

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Compute the following profitability measures for 20-2 (round all calculations to two decimal places):

a. Profit margin ratio		%
b. Return on assets		%
c. Return on common stockholders\' equity		%
d. Earnings per share of common stock	$

a. Profit Margin Ratio = 199,600/2,584,000 = 0.0772 or 7.72%

b. Return on Assets = 199,600/2,991,600 = 0.0667 or 6.67%

c. Return on Common Stockholders Equity = 199,600/2,068,600 = 0.0964 or 9.64%

d. Earnings per share of common stock = 199,600/180,000 = $1.10