Profitability RatiosThe following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5:December 31Total assetsNotes payable (8% interest)Common stockPreferred 4% stock, $100 par(no change during year)Retained earnings20Y7$228,00080,00032,00016,000Return on total assets20Y6$205,00080,00032,00016,00089,04048,000The 20Y7 net income was $30,970, and the 20Y6 net income was $11,350. No dividends on common stock were declared between 20Y5 and 20Y7. Preferreddividends were declared and paid in full in 20Y6 and 20Y7.58,71020Y7a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for the years 20Y6 and 20Y7.Round percentages to one decimal place.17.2 X %20Y5$182,00080,00032,00016,00012.7 X %28.6✔ %20Y6Return on stockholders' equityReturn on common stockholders' equityb. The profitability ratios indicate that the company's profitability has improved ✓. Since the rate of return on total assets is less thanon stockholders' equity in both years, there must be positive leverage from the use of debt.62 X %11.1 X %12.5 ✔ %the return

Financial ratios include various formulas used by the company by using elements reported in the…

Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 2017 20Y6 20Y5 Total assets $228,000 $205,000 $182,000 Notes payable (8% interest) 80,000 80,000 80,000 Common stock 32,000 32,000 32,000 Preferred 4% stock, $100 par 16,000 16,000 16,000 (no change during year) Retained earnings 89,040 58,710 48,000 The 2017 net income was $30,970, and the 20Y6 net income was $11,350. No dividends on common stock were declared between 2005 and 20Y7. Preferred dividends were declared and paid in full in 2006 and 20Y7. a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for the years 20Y6 and 20Y7. Round percentages to one decimal place. Return on total assets Return on stockholders' equity Return on common stockholders' equity 20Y7 20Y6 17.2 X % 62 X % 12.7 X % 11.1 X % 28.6 % 12.5 % b. The profitability ratios indicate that the company's profitability has improved ✓. Since the rate of return on total assets is less than on stockholders' equity in both years, there must be positive leverage from the use of debt. ✓ the return

Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 2017 20Y6 20Y5 Total assets $228,000 $205,000 $182,000 Notes payable (8% interest) 80,000 80,000 80,000 Common stock 32,000 32,000 32,000 Preferred 4% stock, $100 par 16,000 16,000 16,000 (no change during year) Retained earnings 89,040 58,710 48,000 The 2017 net income was $30,970, and the 20Y6 net income was $11,350. No dividends on common stock were declared between 2005 and 20Y7. Preferred dividends were declared and paid in full in 2006 and 20Y7. a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for the years 20Y6 and 20Y7. Round percentages to one decimal place. Return on total assets Return on stockholders' equity Return on common stockholders' equity 20Y7 20Y6 17.2 X % 62 X % 12.7 X % 11.1 X % 28.6 % 12.5 % b. The profitability ratios indicate that the company's profitability has improved ✓. Since the rate of return on total assets is less than on stockholders' equity in both years, there must be positive leverage from the use of debt. ✓ the return

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 67 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Υ1 Retained earnings, January 1 $3,595,450 $3,035,750 Net income 851,200 621,800 Dividends: On preferred stock On common stock (10,500) (10,500) (51,600) (51,600) Retained earnings, December 31 $4,384,550 $3,595,450 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Sales $4,847,930 $4,466,640 Cost of merchandise sold 1,594,320 1,466,770 Gross profit $3,253,610 $2,999,870 Selling expenses $1,112,980 $1,377,430 Administrative expenses 948,100 808,960 Total operating expenses $2,061,080 $2,186,39o Income from operations $1,192,530 $813,480 Other revenue and expense: Other revenue 62,770 51,920 Other expense (interest) (288,000) (158,400)…
Earnings per Share, Price-Earnings Ratio, Dividend Yield The following information was taken from the financial statements of Tolbert Inc. for December 31 of the current fiscal year: Common stock, $25 par value (no change during the year) $6,750,000 Preferred $4 stock, $200 par (no change during the year) 8,000,000 The net income was $862,000 and the declared dividends on the common stock were $67,500 for the current year. The market price of the common stock is $22.10 per share. For the common stock, determine (a) the earnings per share, (b) the price-earnings ratio, (c) the dividends per share, and (d) the dividend yield. If required, round your answers to two decimal places. a. Earnings per Share b. Price-Earnings Ratio c. Dividends per Share d. Dividend Yield %
H
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Y7 20Y6 20Y5 Total assets $250,000 $225,000 $200,000 Notes payable (8% interest) 80,000 80,000 80,000 Common stock 32,000 32,000 32,000 Preferred 7% stock, $100 par 16,000 16,000 16,000 (no change during year) Retained earnings 88,510 64,380 48,000 The 20Y7 net income was $25,250, and the 20Y6 net income was $17,500. No dividends on common stock were declared between 20Y5 and 20Y7. Preferred dividends were declared and paid in full in 20Y6 and 20Y7. a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders’ equity for the years 20Y6 and 20Y7. When required, round to one decimal place. 20Y7 20Y6 Return on total assets fill in the blank 1 % fill in the blank 2 % Return on stockholders’ equity fill…
Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 65 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 $1,173,375 $995,425 Net income 259,200 203,900 Total $1,432,575 $1,199,325 Dividends: On preferred stock $8,400 $8,400 On common stock 17,550 17,550 Total dividends $25,950 $25,950 Retained earnings, December 31 $1,406,625 $1,173,375 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $1,622,790 $1,495,130 Cost of goods sold 611,010 562,130 Gross profit $1,011,780 $933,000 Selling expenses $341,930 $416,290 Administrative expenses 291,280 244,490 Total operating…
Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 59 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 $4,135,050 $3,490,250 Net income 960,000 714,900 Total $5,095,050 $4,205,150 Dividends: On preferred stock $11,900 $11,900 On common stock 58,200 58,200 Total dividends $70,100 $70,100 Retained earnings, December 31 $5,024,950 $4,135,050 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $5,560,775 $5,123,430 Cost of goods sold 2,058,600 1,893,910 Gross profit $3,502,175 $3,229,520 Selling expenses $1,138,660 $1,431,030 Administrative expenses 969,965 840,440 Total…
The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Y7 20Y6 20Y5 Total assets $174,000 $157,000 $140,000 Notes payable (8% interest) 60,000 60,000 60,000 Common stock 24,000 24,000 24,000 Preferred 6% stock, $100 par 12,000 12,000 12,000 (no change during year) Retained earnings 63,550 47,100 36,000 The 20Y7 net income was $17,170, and the 20Y6 net income was $11,820. No dividends on common stock were declared between 20Y5 and 20Y7. Preferred dividends were declared and paid in full in 20Y6 and 20Y7. a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders’ equity for the years 20Y6 and 20Y7. When required, round to one decimal place. 20Y7 20Y6 Return on total assets fill in the blank 1 % fill in the blank 2 % Return on stockholders’ equity fill in the blank 3 % fill…
Subject: accounting
D) return on common stockholders equity.