The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, December 31 20Υ7 20Υ6 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 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' equit and 20Y7. Round percentages to one decimal place. 20Υ7 20Υ6 Return on total assets 15.2 V % 12.2 % Return on stockholders' equity 20.9 16.1 V % Return on common stockholders' equity % b. The profitability ratios indicate that the company's profitability has improved v Since the rate of return on total assets the return on stockholders' eauitv in both vears there must be nositive v leverace from the use of debt.
The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, December 31 20Υ7 20Υ6 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 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' equit and 20Y7. Round percentages to one decimal place. 20Υ7 20Υ6 Return on total assets 15.2 V % 12.2 % Return on stockholders' equity 20.9 16.1 V % Return on common stockholders' equity % b. The profitability ratios indicate that the company's profitability has improved v Since the rate of return on total assets the return on stockholders' eauitv in both vears there must be nositive v leverace from the use of debt.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Pls answer with explanations return on common stockholders equity for 2016 and 2017 thx
Transcribed Image Text:igeNOWV2 | 0.
еВook
Show Me How
E Calculator
The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6,
December 31
20Υ7
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 $12,525. No dividends on common stock were declared
20Y7. Preferred dividends were declared and paid in full in 20Y6 and 20Y7.
a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity
and 20Y7. Round percentages to one decimal place.
20Y7
20Y6
Return on total assets
15.2
12.2
Return on stockholders' equity
20.9
16.1
Return on common stockholders' equity
%
b. The profitability ratios indicate that the company's profitability has improved v
Since the rate of return on total assets
the return on stackholders' eauitv in both vears, there must be oositive v
leverage from the use of debt.
#
%2$
&
3
4.
5
8.
9.
e
y
d
f
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education