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Cream of Tomato Company has the following data available. Net income = $250,000 Sales = $2.5 million Total asset turnover = 3 Equity multiplier = 2.5 Cream of Tomato does not have any preferred stock outstanding. Note that the equity multiplier is defined as total assets to equity. Calculate the return on assets and return on equity for Cream of Tomato.

Cream of Tomato Company has the following data available. Net income = $250,000 Sales = $2.5 million Total asset turnover = 3 Equity multiplier = 2.5 Cream of Tomato does not have any preferred stock outstanding. Note that the equity multiplier is defined as total assets to equity. Calculate the return on assets and return on equity for Cream of Tomato.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cream of tomato company Accounting question

Cream of Tomato Company has the following data available. Net income = $250,000 Sales = $2.5 million Total asset turnover = 3 Equity multiplier = 2.5 Cream of Tomato does not have any preferred stock outstanding. Note that the equity multiplier is defined as total assets to equity. Calculate the return on assets and return on equity for Cream of Tomato.
Transcribed Image Text:Cream of Tomato Company has the following data available. Net income = $250,000 Sales = $2.5 million Total asset turnover = 3 Equity multiplier = 2.5 Cream of Tomato does not have any preferred stock outstanding. Note that the equity multiplier is defined as total assets to equity. Calculate the return on assets and return on equity for Cream of Tomato.
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