Selected financial data from the June 30 year-end statements of Safford Company are given below: Total assets $5,100,000 Long-term debt (10% interest rate) $740,000 Total stockholder's equity $2,200,000 Interest paid on long-term debt $74,000 Net income $410,000 Total assets at the beginning of the year were $4,900,000; total stockholders' equity was $2,000,000. The company's tax rate is 30% Required: 1. Compute the return on total assets. 2. Compute the return on equity.
Selected financial data from the June 30 year-end statements of Safford Company are given below: Total assets $5,100,000 Long-term debt (10% interest rate) $740,000 Total stockholder's equity $2,200,000 Interest paid on long-term debt $74,000 Net income $410,000 Total assets at the beginning of the year were $4,900,000; total stockholders' equity was $2,000,000. The company's tax rate is 30% Required: 1. Compute the return on total assets. 2. Compute the return on equity.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 23MCQ
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