Answer: See explanation
Explanation:
1. Calculate the profit margin
Profit Margin = (Net Income/Net Sales) × 100
Profit Margin = (4,500,000/13,800,000) × 100
Profit Margin = 3.26 × 100
Profit margin = 32.6%
2. Calculate the basic earnings power.
Gross Profit Margin:
= Gross Profit/Net Sales × 100
= (8,700,000/13,800,000) × 100
= 6.304 × 100
= 63.04%
3. Calculate the return on assets.
Return on assets= Net income/Total asset
= 4,500,000/53,800,000
= 0.0836
= 8.36%
4. Calculate the return on equity.
Return on equity = Net income/Equity
= 4,500,000/22,300,000
= 0.2017
= 20.17%
5. Calculate the dividend payout.
Dividend payout = Dividend/Net income
= 2,500,000/4,500,000
= 0.556
= 55.6%
