Question

Suppose selected comparative statement data for the giant bookseller Barnes & Noble are presented here. All balance sheet data are as of the end of the fiscal year (in millions). 2020 2019 Net sales $4,750 $5,501 Cost of goods sold 3,300 3,701 Net income 85 110 Accounts receivable 75 125 Inventory 1,150 1,250 Total assets 2,850 3,250 Total common stockholders’ equity 900 1,121 Compute the following ratios for 2020.

Answer 1

See below

Step-by-step explanation:

The following ratios are calculable with the information.

Profit margin

Margin = Net profit / Sales

2019 = 110 / $5,501 = 1.99%

2020 = 85 / 4750 = 1.79%

Assets Turnover

AT = Sales / Total assets

2019 = 5,501 / 3,250 = 1.69 times

2020 = 4750 / 2850 = 1.66 times

Inventory Turnover

IT = Cost of goods sold / {(opening Inventory + Closing Inventory)/2]

Inventory Turnover for 2020 = 3300 / [(1150+1250)/2]

Inventory turnover = 2.75 times

Gross margin

Gross profit = Gross profit / Sales

2019 = (5501-3701) / 5501 = 32.7%

2020 = (4750-3300) / 4750 = 30.5%

Hope these are what you are looking for.