Profitability Analysis Exercises and Problems

Colorado State University Profitability Analysis Exercises Worksheet

Option #1: Profitability Analysis Exercises and Problems

DO THE ASSIGNED PROBLEMS USING SUMMER PEEBLES, INC.’S CONDENSED 2014 FINANCIAL DATA BELOW:

Assets

Current Assets

$250,000.00

Noncurrent Assets

$1,750,000.00

Total Assets

$2,000,000.00

Liabilities and Equity

Current Liabilities

$200,000.00

Noncurrent Liabilities (8% Bonds)

$675,000.00

Common Stockholders' Equity

$1,125,000.00

Total Liabilities and Equity

$2,000,000.00

Additional Information:

Net income for 2014 is $157,500.

Income tax rate is 50%.

Amounts for total assets and shareholders' equity are the same for 2013 and 2014.

All assets and current liabilities are considered to be operating.