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Financial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134833156
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Textbook Question
Chapter 10, Problem 10.37AE
(Learning Objective 5: Evaluate profitability) Carolina Company included the following items in its financial statements for 2018, the current year (amounts in millions):
Payment of long-term debt.......... | $17,100 |
Proceeds from issuance of common stock..................... | 8,500 |
Total liabilities: | |
Current year-end..................... | 32,319 |
Preceding year-end.................. | 38,023 |
Total stockholders’ equity: | |
Current year-end..................... | 23,479 |
Preceding year-end.................. | 14,033 |
Long-term liabilities.................... | 6,585 |
Dividends paid..................... | $ 215 |
Net sales; | |
Current year..................... | 60,000 |
Preceding year | 92,000 |
Net income: | |
Current year..................... | 2,200 |
Preceding year.................. | 2,005 |
Operating income: | |
Current year..................... | 4,880 |
Preceding year.................. | 4,006 |
Requirements
- 1. Use DuPont Analysis to calculate Carolina’s return on assets and return on common equity during 2018 (the current year). The company has no
preferred stock outstanding. - 2. Do the company’s
rates of return look strong or weak? Give your reason. - 3. What additional information do you need to make the decision in requirement 2?
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Chapter 10 Solutions
Financial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)
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