During a recent period, the fast-food chain Wendy's International purchased many treasury shares. This caused the number of shares outstanding to fall from 124 million to 105 million. The following information was drawn from the company's financial statements (in millions). Information for the Year After Purchase of Treasury Stock Information for the Year Before Purchase of Treasury Stock Net income Total assets Average total assets $193.6 $123.4 2,076.0 1,837.9 2,016.9 1,889.8 Total common stockholders' equity 1,029.8 1,068.1 Average common stockholders' equity 1,078.0 1,126.2 Total liabilities 1,046.3 769.9 Average total liabilities 939.0 763.7 Interest expense 30.2 19.8 Income taxes 113.7 84.3 Cash provided by operations 305.2 233.8 Cash dividends paid on common stock 26.8 31.0 Preferred stock dividends 0 0 Average number of common shares outstanding 109.7 119.9 Use the information provided to answer the following questions. (a1) Compute earnings per share, return on common stockholders' equity, and return on assets for both years. (Round earnings per share to 2 decimal places, e.g. 15.12 and all other answers to 1 decimal place, e.g. 15.2%.) Earnings per share Return on common stockholders' equity Return on assets Year Ended After Purchase of Before Purchase of Treasury Stock Treasury Stock $ $ % % % %
During a recent period, the fast-food chain Wendy's International purchased many treasury shares. This caused the number of shares outstanding to fall from 124 million to 105 million. The following information was drawn from the company's financial statements (in millions). Information for the Year After Purchase of Treasury Stock Information for the Year Before Purchase of Treasury Stock Net income Total assets Average total assets $193.6 $123.4 2,076.0 1,837.9 2,016.9 1,889.8 Total common stockholders' equity 1,029.8 1,068.1 Average common stockholders' equity 1,078.0 1,126.2 Total liabilities 1,046.3 769.9 Average total liabilities 939.0 763.7 Interest expense 30.2 19.8 Income taxes 113.7 84.3 Cash provided by operations 305.2 233.8 Cash dividends paid on common stock 26.8 31.0 Preferred stock dividends 0 0 Average number of common shares outstanding 109.7 119.9 Use the information provided to answer the following questions. (a1) Compute earnings per share, return on common stockholders' equity, and return on assets for both years. (Round earnings per share to 2 decimal places, e.g. 15.12 and all other answers to 1 decimal place, e.g. 15.2%.) Earnings per share Return on common stockholders' equity Return on assets Year Ended After Purchase of Before Purchase of Treasury Stock Treasury Stock $ $ % % % %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:During a recent period, the fast-food chain Wendy's International purchased many treasury shares. This caused the number of shares
outstanding to fall from 124 million to 105 million. The following information was drawn from the company's financial statements (in
millions).
Year After Purchase
of Treasury Stock
Net income
Total assets
Average total assets
$193.6
Information for the
Information for the
Year Before Purchase
of Treasury Stock
$123.4
2,076.0
1,837.9
2,016.9
1,889.8
Total common stockholders' equity
1,029.8
1,068.1
Average common stockholders' equity
1,078.0
1,126.2
Total liabilities
1,046.3
769.9
Average total liabilities
939.0
763.7
Interest expense
30.2
19.8
Income taxes
113.7
84.3
Cash provided by operations
305.2
233.8
Cash dividends paid on common stock
26.8
31.0
Preferred stock dividends
0
0
Average number of common shares outstanding
109.7
119.9
Use the information provided to answer the following questions.
(a1)
Compute earnings per share, return on common stockholders' equity, and return on assets for both years. (Round earnings per
share to 2 decimal places, e.g. 15.12 and all other answers to 1 decimal place, e.g. 15.2%.)
Earnings per share
Return on common stockholders' equity
Return on assets
eTextbook and Media
Year Ended
After Purchase of
Treasury Stock
Before Purchase of
Treasury Stock
%
%
%
%
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