East Point Retail, Inc. sells apparel through company-owned retail stores. Recent financial information for East Point follows (in thousands): Fiscal Year 3 Fiscal Year 2 Net income (loss) $145,500 $(74,900) Interest expense 3,000 11,200 Fiscal Year 3 Fiscal Year 2 Fiscal Year 1 Total assets (at end of fiscal year) $1,654,483 $1,573,777 $1,395,189 Total stockholders' equity (at end of fiscal year) 1,013,482 993,414 728,426 Assume the apparel industry average return on total assets is 5.0% and the average return on stockholders' equity is 8.0% for the year ended February 2, Year 3. a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round percentages to one decimal place. If required, use a minus sign to indicate a negative return on total assets. Fiscal Year 3 % Fiscal Year 2 % b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round percentages to one decimal place. If required, use a minus sign to indicate a negative return on stockholders' equity. Fiscal Year 3 % Fiscal Year 2 %
East Point Retail, Inc. sells apparel through company-owned retail stores. Recent financial information for East Point follows (in thousands): Fiscal Year 3 Fiscal Year 2 Net income (loss) $145,500 $(74,900) Interest expense 3,000 11,200 Fiscal Year 3 Fiscal Year 2 Fiscal Year 1 Total assets (at end of fiscal year) $1,654,483 $1,573,777 $1,395,189 Total stockholders' equity (at end of fiscal year) 1,013,482 993,414 728,426 Assume the apparel industry average return on total assets is 5.0% and the average return on stockholders' equity is 8.0% for the year ended February 2, Year 3. a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round percentages to one decimal place. If required, use a minus sign to indicate a negative return on total assets. Fiscal Year 3 % Fiscal Year 2 % b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round percentages to one decimal place. If required, use a minus sign to indicate a negative return on stockholders' equity. Fiscal Year 3 % Fiscal Year 2 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Profitability Ratios
East Point Retail, Inc. sells apparel through company-owned retail stores. Recent financial information for East Point follows (in thousands):
Fiscal Year 3 Fiscal Year 2
Net income (loss)
$145,500
$(74,900)
Interest expense
3,000
11,200
Fiscal Year 3 Fiscal Year 2 Fiscal Year 1
Total assets (at end of fiscal year)
$1,654,483
$1,573,777
$1,395,189
Total stockholders' equity (at end of fiscal year)
1,013,482
993,414
728,426
Assume the apparel industry average return on total assets is 5.0% and the average return on stockholders' equity is 8.0% for the year ended February
2, Year 3.
a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round percentages to one decimal place. If required, use a minus
sign to indicate a negative return on total assets.
Fiscal Year 3
%
Fiscal Year 2
%
b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round percentages to one decimal place. If required, use a
minus sign to indicate a negative return on stockholders' equity.
Fiscal Year 3
%
Fiscal Year 2
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0d3975cd-4ee1-4a32-9a42-7564910249af%2Fd5f87c21-2052-4fd6-aae7-e974eb0c9a24%2Fcwslqpm_processed.png&w=3840&q=75)
Transcribed Image Text:Profitability Ratios
East Point Retail, Inc. sells apparel through company-owned retail stores. Recent financial information for East Point follows (in thousands):
Fiscal Year 3 Fiscal Year 2
Net income (loss)
$145,500
$(74,900)
Interest expense
3,000
11,200
Fiscal Year 3 Fiscal Year 2 Fiscal Year 1
Total assets (at end of fiscal year)
$1,654,483
$1,573,777
$1,395,189
Total stockholders' equity (at end of fiscal year)
1,013,482
993,414
728,426
Assume the apparel industry average return on total assets is 5.0% and the average return on stockholders' equity is 8.0% for the year ended February
2, Year 3.
a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round percentages to one decimal place. If required, use a minus
sign to indicate a negative return on total assets.
Fiscal Year 3
%
Fiscal Year 2
%
b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round percentages to one decimal place. If required, use a
minus sign to indicate a negative return on stockholders' equity.
Fiscal Year 3
%
Fiscal Year 2
%
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