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 $233,000 $210,000 $187,000 Notes payable (8% interest) 80,000 80,000 80,000 Common stock 32,000 32,000 32,000 Preferred 3% stock, $100 par 16,000 16,000 16,000 (no change during year) Retained earnings 92,745 61,355 48,000 The 20Y7 net income was $31,870, and the 20Y6 net income was $13,835. 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 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 $233,000 $210,000 $187,000 Notes payable (8% interest) 80,000 80,000 80,000 Common stock 32,000 32,000 32,000 Preferred 3% stock, $100 par 16,000 16,000 16,000 (no change during year) Retained earnings 92,745 61,355 48,000 The 20Y7 net income was $31,870, and the 20Y6 net income was $13,835. 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 common stockholders’ equity for the years 20Y6 and 20Y7. Round percentages to one decimal place
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Profitability Ratios
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 | $233,000 | $210,000 | $187,000 | ||||
| Notes payable (8% interest) | 80,000 | 80,000 | 80,000 | ||||
| Common stock | 32,000 | 32,000 | 32,000 | ||||
| 16,000 | 16,000 | 16,000 | |||||
| (no change during year) | |||||||
| 92,745 | 61,355 | 48,000 |
The 20Y7 net income was $31,870, and the 20Y6 net income was $13,835. 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 common
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