Required: a. Calculate ROI for 2014. Round your percentage answer to two decimal places. b. Calculate ROE for 2014. Round your percentage answer to one decimal place. Calculate working capital at December 31, 2014. с.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter5: Completing The Accounting Cycle
Section: Chapter Questions
Problem 13PA: Using the following Balance Sheet summary information, for the two years presented calculate: A....
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Required:
a. Calculate ROI for 2014. Round your percentage answer to two decimal places.
b. Calculate ROE for 2014. Round your percentage answer to one decimal place.
Calculate working capital at December 31, 2014.
с.
Transcribed Image Text:Required: a. Calculate ROI for 2014. Round your percentage answer to two decimal places. b. Calculate ROE for 2014. Round your percentage answer to one decimal place. Calculate working capital at December 31, 2014. с.
Expert Solution
Ratios

Return on Investment (ROI) is used to measure overall profitability of the business. It can be calculated as follows:

                                 Accounting homework question answer, step 1, image 1

Return on Equity (ROE) represents the company’s profitability over the owner’s capital. It can be calculated as follows:

                                          Accounting homework question answer, step 1, image 2

Net profit ratio shows the net income margin on sales. It may be calculated as follows:

                                     Accounting homework question answer, step 1, image 3

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