if design and royal have equity of 40 000 and 21 000 respectively which company is t 650213
Business Applications Case Using ratios to make comparisons
The following income statements were drawn from the annual reports of Design Company and Royal Company.
Design |
Royal |
|
Net Sales |
$95,700 |
$52,300 |
Cost of Goods Sold |
68,900 |
31,400 |
Gross Margin |
26,800 |
20,900 |
Less: Selling and Admin. Expenses |
22,000 |
18,800 |
Net Income |
$4,800 |
$2,100 |
Required
a. One of the companies is a high end retailer that operates in exclusive shopping malls. The other operates discount stores located in low cost stand alone buildings. Identify the high end retailer and the discounter. Support your answer with appropriate ratios.
b. If Design and Royal have equity of $40,000 and $21,000, respectively, which company is the more profitable?