The most recent financial statements for Live Co. are shown here: Income Statement Sales Costs Taxable income. Taxes (33%) Net income $15,000 Current assets Fixed -assets $6,000 Total 1,980 $4,020 9,000 Balance Sheet $32,345 Debt 22,633 Equity $54,978 Total $31,878 23,100 $54,978 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio. No external equity financing is possible.
The most recent financial statements for Live Co. are shown here: Income Statement Sales Costs Taxable income. Taxes (33%) Net income $15,000 Current assets Fixed -assets $6,000 Total 1,980 $4,020 9,000 Balance Sheet $32,345 Debt 22,633 Equity $54,978 Total $31,878 23,100 $54,978 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio. No external equity financing is possible.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 51E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...
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Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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