2.13.1: Using the data below, compute RETURN ON EQUITY.Accounts Receivable: $5,000Advertising Expense: 1,600Cash: 500Cost of Goods Sold: 6,000Inventory: 3,000Property, ant, and Equipment: 12,000Research Expense: 2,000Sales: 20,000Total Equity: 7,500Total Liabilities: 13,000Wage Expense: 10,0005.3%2.0%6.7%3.1%18.8%

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Description: 2.13.1: Using the data below, compute RETURN ON EQUITY.Accounts Receivable: $5,000Advertising Expense: 1,600Cash: 500Cost of Goods Sold: 6,000Inventory: 3,000Property, ant, and Equipment: 12,000Research Expense: 2,000Sales: 20,000Total Equity: 7,500

Return on Equity is one of the profitability ratio being used in business. This shows how much…

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Finance

2.13.1: Using the data below, compute RETURN ON EQUITY. Accounts Receivable: $5,000 Advertising Expense: 1,600 Cash: 500 Cost of Goods Sold: 6,000 Inventory: 3,000 Property, Plant, and Equipment: 12,000 Research Expense: 2,000 Sales: 20,000 Total Equity: 7,500 Total Liabilities: 13,000 Wage Expense: 10,000 5.3% 2.0% 6.7% 3.1% 18.8%

2.13.1: Using the data below, compute RETURN ON EQUITY. Accounts Receivable: $5,000 Advertising Expense: 1,600 Cash: 500 Cost of Goods Sold: 6,000 Inventory: 3,000 Property, Plant, and Equipment: 12,000 Research Expense: 2,000 Sales: 20,000 Total Equity: 7,500 Total Liabilities: 13,000 Wage Expense: 10,000 5.3% 2.0% 6.7% 3.1% 18.8%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

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Concept explainers

Financial Ratios

A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.

Return on Equity

The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.

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2.13.1: Using the data below, compute RETURN ON EQUITY.
Accounts Receivable: $5,000
Advertising Expense: 1,600
Cash: 500
Cost of Goods Sold: 6,000
Inventory: 3,000
Property, ant, and Equipment: 12,000
Research Expense: 2,000
Sales: 20,000
Total Equity: 7,500
Total Liabilities: 13,000
Wage Expense: 10,000
5.3%
2.0%
6.7%
3.1%
18.8%

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Compute Return on equity ratio if Net Income:2.026 ; Sales:17.193 ;Total Assets: 31.483 ; Total Equity: 12.804. a) 17.82%b) 11.78%c) 15.82%d) 6.44%
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Given the information below, calculate the Working Capital and Current Ratio 1 Cash and marketable securities - $3,500,000 2 Accounts Receivable (Gross) - $2,000,000 Allowance for doubtful accounts 2.5% 3 Accounts Payable - $2,500,000 4 Accumulated Depreciation 2,500,000 6 Inventory - $3,500,000 7 Other Current Assets - $1,000,000 8 Common Stock at Par Value - $100,000 9 Current portion of long term notes - $1,000,000 10 Other Current Liabilities - $1,950,000 11 Goodwill - $10,000,000 12 Long-Term debt - $10,000,000
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