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 $312,000 $281,000 $250,000 Notes payable (8% interest) 100,000 100,000 100,000 Common stock 40,000 40,000 40,000 Preferred 5% stock, $100 par 20,000 20,000 20,000 (no change during year) Retained earnings 122,610 86,170 60,000 The 20Y7 net income was $37,440, and the 20Y6 net income was $27,170. 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 rate earned 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 in the blank 4 % Return on common stockholders’ equity fill in the blank 5 % fill in the blank 6 %
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 $312,000 $281,000 $250,000 Notes payable (8% interest) 100,000 100,000 100,000 Common stock 40,000 40,000 40,000 Preferred 5% stock, $100 par 20,000 20,000 20,000 (no change during year) Retained earnings 122,610 86,170 60,000 The 20Y7 net income was $37,440, and the 20Y6 net income was $27,170. 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 rate earned 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 in the blank 4 % Return on common stockholders’ equity fill in the blank 5 % fill in the blank 6 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 | $312,000 | $281,000 | $250,000 | ||||
| Notes payable (8% interest) | 100,000 | 100,000 | 100,000 | ||||
| Common stock | 40,000 | 40,000 | 40,000 | ||||
| 20,000 | 20,000 | 20,000 | |||||
| (no change during year) | |||||||
| Retained earnings | 122,610 | 86,170 | 60,000 |
The 20Y7 net income was $37,440, and the 20Y6 net income was $27,170. 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 rate earned on
| 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 in the blank 4 | % |
| Return on common stockholders’ equity | fill in the blank 5 | % | fill in the blank 6 | % |
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