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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
Profitability Ratios Maggie’s Skunk Removal, Corp.’s 2008 income statement listed net sales = $12.5 million, EBIT = $5.6 million, net income available to common stockholders = $3.2 million, and common stock dividends = $1.2 million. The 2008 year-end balance sheet listed total assets = $52.5 million, and common stockholders equity = $21 million with 2 million shares outstanding. Calculate the profit margin, basic earnings power ratio, ROA, ROE, and dividend payout ratio.
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$3.2m. - $1.2m.
Profit margin = ——————— = 16.00%
$12.5m.
$5.6m.
Basic earnings power ratio (BEP) = ——— = 10.67%
$52.5m.
Â
$3.2m.
Return on assets (ROA) = ——— = 6.095%
$52.5m.
Â
$3.2m.
Return on equity (ROE) = ——— = 15.24%
$21m.
Â
$1.2m.
Dividend payout ratio = ——— = 37.50%
$3.2m.
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