Data for Connor, Inc. and Alto Corp. follow:
Net Sales Revenue $ 13,000 $ 22,000
Cost of Goods Sold 7,917 15,730
Other Expenses 4,342 5,170
Net Income $ 741 $ 1,100
1. Prepare common-size income statements.
2. Which company earns more net income?
3. Which company’s net income is a higher percentage of its net sales revenue?
Connor’s net Income Increases
Net Sales (a)
Less: Cost of Sales (b)
Gross profit €
Less: Other Expenses (d)
Net Income €
Alto Company earns more net income as compared to Conner of $741.
The Company Connor i.e., 5.70% has a higher net income Percentage of its net sales revenue as compared to Alto 5.00%
Computing EPS and P/E ratio
1. Compute earnings per share (EPS) for 2018 for Accel’s. Round to the nearest cent.
2. Compute Accel’s Companies’ price/earnings ratio for 2018. The market price per
share of Accel’s stock is $12.50.
3. What do these results mean when evaluating Accel’s Companies’ profitability?
Determining the effects of business transactions on selected ratios Financial statement data of Style Traveler Magazine include the following items:
Accounts Receivable, Net
Short-term Notes Payable
Common Shares Outstanding
Current Ratio Debt Ratio Earnings per Share
2. Compute the three ratios after evaluating the effect of each transaction that follows. Consider each transaction separately
Net sales revenue, net income, and commonA stockholders’ equity for Azbel Mission Corporation, a manufacturer of contact lenses, follow for a four-year period.
1. Compute trend analyses for each item for 2017–2019. Use 2016 as the base year,and round to the nearest whole percent.
2. Compute the rate of return on common stockholders’ equity for 2017–2019, rounding to three decimal places.
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