East Point Retail, Inc., sells apparel through company-owned retail stores. Financial information for East Point follows (in thousands): Net income Interest expense Fiscal Year 3 Fiscal Year 2 $161,600 3,300 Total assets (at end of fiscal year) Total stockholders' equity (at end of fiscal year) Fiscal Year 3 Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders' equity is 15.0% for the year ended April 2, Year 3. Fiscal Year 2 a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. Fiscal Year 3 Fiscal Year 2 % $83,200 12,400 % b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. Fiscal Year 3 Fiscal Year 2 Fiscal Year 1 $2,820,657 $2,490,455 $2,965,307 1,305,728 1,279,872 938,794 % % The return on stockholders' equity is greater than ✓ the return on total accots due to the positive ✓ Use of

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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East Point Retail, Inc., sells apparel through company-owned retail stores. Financial information for East Point follows (in
thousands):
Net income
Interest expense
Fiscal Year 3 Fiscal Year 2 Fiscal Year 1
$2,965,307
$2,820,657 $2,490,455
938,794
1,305,728 1,279,872
Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders' equity is 15.0% for the
year ended April 2, Year 3.
a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round your answers to one decimal place.
Fiscal Year 3
Total assets (at end of fiscal year)
Total stockholders' equity (at end of fiscal year)
Fiscal Year 2
Fiscal Year 3 Fiscal Year 2
$83,200
12,400
$161,600
3,300
Fiscal Year 3
Fiscal Year 2
b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round your answers to one decimal place.
%
olders!
%
%
%
the ra
Transcribed Image Text:East Point Retail, Inc., sells apparel through company-owned retail stores. Financial information for East Point follows (in thousands): Net income Interest expense Fiscal Year 3 Fiscal Year 2 Fiscal Year 1 $2,965,307 $2,820,657 $2,490,455 938,794 1,305,728 1,279,872 Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders' equity is 15.0% for the year ended April 2, Year 3. a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. Fiscal Year 3 Total assets (at end of fiscal year) Total stockholders' equity (at end of fiscal year) Fiscal Year 2 Fiscal Year 3 Fiscal Year 2 $83,200 12,400 $161,600 3,300 Fiscal Year 3 Fiscal Year 2 b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. % olders! % % % the ra
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