70.2K

Verified Solution

Link Copied!

Consider the following condensed financial statements of Freedom, Inc. The company's target rate of return is 20%: E (Click the icon to view the comparative balance sheet.) B (Click the icon to view the income statement.) Read the requirements. Requirement 1. Calculate the company's ROI. Round all of your answers to four decimal places. Begin by selecting the formula to calculate return on investment (ROI), and then enter the amounts to calculate the company's ROI. (Round your calculations to four decimal places and enter your final to the nearest hundredth of a percent, X.XX%) Operating income Average total assets ROI 450,000 II 11 % Data Table Freedom, Inc. Comparative Balance Sheet As of December 31, 2018 and 2017 2018 2017 Assets Cash $ 73,000 $ 58,200 61,000 26,800 Accounts Receivable Supplies 1,800 1.200 Property, Plant, and Equipment, net Patents, net 304,000 153,000 590,000 $ 211,000 110,000 410,000 $ Total Assets Liabilities and Stockholders' Equity Accounts Payable $ 26,000 $ Short-term Notes Payable 145,000 Long-term Notes Payable 193,000 Common Stock, no Par 205,000 Retained Earnings 21,000 $ 590,000 $ Total Liabilities and Stockholders' Equity 28,000 51,000 123,500 197,000 10,500 410,000 Print Done Data Table Freedom, Inc. Income Statement For the Year Ended December 31, 2018 Net Sales Revenue $ 9,000,000 Cost of Goods Sold 5,200,000 Gross Profit 3,800,000 Operating Expenses 3,350,000 Operating Income 450,000 Other Income and (Expenses): Interest Expense (31,000) Income Before Income Tax Expense 419,000 Income Tax Expense 146,650 $ 272,350 Net Income Print Done Requirements 1. 3. Calculate the company's ROI. Round all of your answers to four decimal places. Calculate the company's profit margin ratio. Interpret your results. Calculate the company's asset turnover ratio. Interpret your results. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results. Calculate the company's RI. Interpret your results. 5. Print Done Done

Answer & Explanation Solved by verified expert

See Answer