The following information relates to Zoch Corporation: Year 1 1.37 19% 47% Net operating assets/common equity Net operating profit margin Income tax rate Revenues/average net operating EBIT/revenues assets 0.81 38% Year 2 1.53 21% 28% 0.61 32%

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Question 1
The following information relates to Zoch Corporation:
Net operating assets/common equity
Net operating profit margin
Income tax rate
Revenues/average net operating
assets
Year 1
1.37
19%
47%
0.81
Year 2
1.53
21%
28%
0.61
32%
EBIT/revenues
Required
a) What is return on net operating assets for Year 1 and 2 ? Please show your calculation
b) What is Return on common equity for Year 1 and 2? Please show your calculation
38%
Transcribed Image Text:Question 1 The following information relates to Zoch Corporation: Net operating assets/common equity Net operating profit margin Income tax rate Revenues/average net operating assets Year 1 1.37 19% 47% 0.81 Year 2 1.53 21% 28% 0.61 32% EBIT/revenues Required a) What is return on net operating assets for Year 1 and 2 ? Please show your calculation b) What is Return on common equity for Year 1 and 2? Please show your calculation 38%
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