Presented below are summary financial data from Pebble Company’s annual report:Assume that the Pebble Company is all equity financed.Calculate the following ratios for Years 1 and 2: Return on equity, Return on assets (levered), Return on sales (levered), Total asset turnover, Financial leverage ### Financial Overview#### Balance Sheet- **Total Assets** - Year 2: $111,005 million - Year 1: $153,304 million- **Shareholders' Equity** - Year 2: $68,612 million - Year 1: $69,493 million#### Income Statement- **Net Sales** - Year 2: $101,303 million - Year 1: $96,004 million- **Net Income** - Year 2: $14,132 million - Year 1: $14,490 millionThis data provides a financial comparison between Year 1 and Year 2, illustrating changes in total assets, shareholders' equity, net sales, and net income.

The question refers to five financial ratios. So first let us just have a brief on these financial…

Answered: Presented below are summary financial…

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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Presented below are summary financial data from Pebble Company’s annual report:

Assume that the Pebble Company is all equity financed.

Calculate the following ratios for Years 1 and 2: Return on equity, Return on assets (levered), Return on sales (levered), Total asset turnover, Financial leverage

### Financial Overview

#### Balance Sheet
- **Total Assets**
- Year 2: $111,005 million
- Year 1: $153,304 million

- **Shareholders' Equity**
- Year 2: $68,612 million
- Year 1: $69,493 million

#### Income Statement
- **Net Sales**
- Year 2: $101,303 million
- Year 1: $96,004 million

- **Net Income**
- Year 2: $14,132 million
- Year 1: $14,490 million

This data provides a financial comparison between Year 1 and Year 2, illustrating changes in total assets, shareholders' equity, net sales, and net income.

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