Net income Interest expense $146,200 3,000 Fiscal Year 2 $3,398,445 $3,232,667 $2,945,905 1,220,347 1,196,181 866,833 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 to one decimal place. Fiscal Year 3 Fiscal Year 2 b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round to one decimal place. Fiscal Year 3 Fiscal Year 2 c. The return on stockholders' equity is the return on total assets due to the use of leverage. d. During fiscal Year 3, East Point's results were Point was compared to the industry average. The return on total assets for East than the industry average. The return on stockholders' equity was than the industry average. These relationships suggest that East Point has leverage than the industry, on average. Total assets (at end of fiscal year) Total stockholders' equity (at end of fiscal year) 23.1 % % $75,300 11,200 % % Fiscal Year 3 Fiscal Year 1

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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y Home
Net income
w.com/ilm/takeAssignment/takeAssignmentMain.do?invo... A
Interest expense
X
CengageNOWv2 | Online teachin x +
O
10
Fiscal Year 3 Fiscal Year 2
$146,200
$75,300
3,000
11,200
Total assets (at end of fiscal year)
Total stockholders' equity (at end of fiscal year)
Fiscal Year 3
$3,398,445
1,220,347
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 to one decimal place.
Fiscal Year 3
Fiscal Year 2
b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round to one decimal place.
Fiscal Year 3
Fiscal Year 2
c. The return on stockholders' equity is
use of leverage.
d. During fiscal Year 3, East Point's results were
compared to the industry average. The return on total assets for East
Point was
than the industry average. The return on stockholders' equity was
than the industry
average. These relationships suggest that East Point has
leverage than the industry, on average.
23.1 %
%
%
%
M
b
hp
O
R
Fiscal Year 2
$3,232,667
1,196,181
Fiscal Year 1
$2,945,905
866,833
C
the return on total assets due to the
●
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51°F Cloudy (40)
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9:30
AAQQ 2/10
Transcribed Image Text:y Home Net income w.com/ilm/takeAssignment/takeAssignmentMain.do?invo... A Interest expense X CengageNOWv2 | Online teachin x + O 10 Fiscal Year 3 Fiscal Year 2 $146,200 $75,300 3,000 11,200 Total assets (at end of fiscal year) Total stockholders' equity (at end of fiscal year) Fiscal Year 3 $3,398,445 1,220,347 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 to one decimal place. Fiscal Year 3 Fiscal Year 2 b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round to one decimal place. Fiscal Year 3 Fiscal Year 2 c. The return on stockholders' equity is use of leverage. d. During fiscal Year 3, East Point's results were compared to the industry average. The return on total assets for East Point was than the industry average. The return on stockholders' equity was than the industry average. These relationships suggest that East Point has leverage than the industry, on average. 23.1 % % % % M b hp O R Fiscal Year 2 $3,232,667 1,196,181 Fiscal Year 1 $2,945,905 866,833 C the return on total assets due to the ● Previous Next 51°F Cloudy (40) S 9:30 AAQQ 2/10
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Step 1 Introduction

The ratio analysis is performed by comparing the different elements of the financial statements of the business. The return on total assets and return on stockholders' equity are the important ratios to measure the financial performance of the business for the current period.

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