Try another version of this question Carlo Works, Inc.’s comparative income statement follows. Use this information to calculate the following ratios. 1. Calculate the profit margin ratio for 2020 and 2019. ` (` Net income `)` `/` `(` Net Sales `)` `=` Profit margin ratio 2020: `(` `$` `)` `/` `(` `$` `)` `=` `%` 2019: `(` `$` `)` `/` `(` `$` `)` `=` `%` 2. Calculate the rate of return on total assets for 2020 and 2019. ` (` Net income `+` Interest expense `)` `/` `(` Average total assets `)` `=` Rate of return on total assets 2020: `(` `$` `+` `$` `)` `/` `(` `$` `)` `=` `%` 2019: `(` `$` `+` `$` `)` `/` `(` `$` `)` `=` `%` 3. Calculate the asset turnover ratio for 2020 and 2019. ` (` Net sales `)` `/` `(` Average total assets `)` `=` Asset turnover ratio 2020: `(` `$` `)` `/` `(` `$` `)` `=` 2019: `(` `$` `)` `/` `(` `$` `)` `=` 4. Calculate the rate of return on common stockholders’ equity for 2020 and 2019. ` (` Net income `-` Preferred Dividends `)` `/` `(` Average Common Stockholders Equity `)` `=` Rate of Return on Common Stockholders Equity 2020: `(` `$` `-` `$` `)` `/` `(` `$` `)` `=` `%` 2019: `(` `$` `-` `$` `)` `/` `(` `$` `)` `=` `%` 5. Calculate the earnings per share for 2020 and 2019. ` (` Net income `-` Preferred Dividends `)` `/` `(` Weighted average number of common shares outstanding `)` `=` Earnings per share 2020: `(` `$` `-` `$` `)` `/` `(` `)` `=` `$` 2019: `(` `$` `-` `$` `)` `/` `(` `)` `=` `$` 6. Calculate the 2020 dividend payout on common stock. Assume dividends per share for common stock are equal to $0.55 per share. ` (` Annual dividend per share `)` `/` `(` Earnings per share `)` `=` Dividend payout 2020: `(` `$` `)` `/` `(` `$` `)` `=` `%`
Comparative Income Statement
For Years Ending Dec. 31, 2020 and 20192020 2019 2018 Net Sales 192,000 154,000 Cost of Goods Sold 96,000 86,000 Selling & Administration Exp. 46,900 40,000 Interest Expense 9,800 10,900 Income Tax Expense 11,000 9,000 Net Income 28,300 8,100 Additional Data: Total Assets 205,000 198,000 163,000 Common Stockholders' Equity 94,000 85,500 79,000 Preferred Dividends 1,900 1,600 0 Common Shares Outstanding 19,300 20,200 10,300