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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 $168,000 $151,000 $134,000 Notes payable (8% Interest) 60,000 60,000 60,000 Common stock 24,000 24,000 24,000 Preferred 4% stock, $100 par 12,000 12,000 12,000 (no change during year) Retained earnings 67,085 48,045 36,000 The 20Y7 net income was $19,520, and the 20Y6 net Income was $12,525. 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. Round percentages to one decimal place.

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 $168,000 $151,000 $134,000 Notes payable (8% Interest) 60,000 60,000 60,000 Common stock 24,000 24,000 24,000 Preferred 4% stock, $100 par 12,000 12,000 12,000 (no change during year) Retained earnings 67,085 48,045 36,000 The 20Y7 net income was $19,520, and the 20Y6 net Income was $12,525. 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. Round percentages to one decimal place.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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eBook Show Me How Calculator 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 $168,000 $151,000 $134,000 Notes payable (8% interest) 60,000 60,000 60,000 Common stock 24,000 24,000 24,000 Preferred 4% stock, $100 par 12,000 12,000 12,000 (no change during year) Retained earnings 67,085 48,045 36,000 The 20Y7 net income was $19,520, and the 20Y6 net income was $12,525. 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. Round percentages to one decimal place. 20Y7 20Y6 Return on total assets 15.2 % 12.2 Return on stockholders' equity % Return on common stockholders' equity b. The profitability ratios indicate that the company's profitability has Improved Since the rate of return on total assets is less than the return on stockholders' equity in both vears, there must be positive leverage from the use of debt. VO 12:12 DII % backspace 8. t y f j k V m alt ctrl
Transcribed Image Text:eBook Show Me How Calculator 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 $168,000 $151,000 $134,000 Notes payable (8% interest) 60,000 60,000 60,000 Common stock 24,000 24,000 24,000 Preferred 4% stock, $100 par 12,000 12,000 12,000 (no change during year) Retained earnings 67,085 48,045 36,000 The 20Y7 net income was $19,520, and the 20Y6 net income was $12,525. 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. Round percentages to one decimal place. 20Y7 20Y6 Return on total assets 15.2 % 12.2 Return on stockholders' equity % Return on common stockholders' equity b. The profitability ratios indicate that the company's profitability has Improved Since the rate of return on total assets is less than the return on stockholders' equity in both vears, there must be positive leverage from the use of debt. VO 12:12 DII % backspace 8. t y f j k V m alt ctrl
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