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In: Accounting
9. Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc....
9.
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 | $220,000 | $198,000 | $176,000 | ||||
| Notes payable (8% interest) | 70,000 | 70,000 | 70,000 | ||||
| Common stock | 28,000 | 28,000 | 28,000 | ||||
| Preferred 3% stock, $100 par | 14,000 | 14,000 | 14,000 | ||||
| (no change during year) | |||||||
| Retained earnings | 79,080 | 55,150 | 42,000 | ||||
The 20Y7 net income was $24,350, and the 20Y6 net income was $13,570. 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 | % | % | ||
| Return on stockholders’ equity | % | % | ||
| Return on common stockholders’ equity | % | % | ||
Solutions
ekkarill92 answered 9 months agoRelated Solutions
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for...
Profitability Ratios
The following selected data were taken from the financial
statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and
20Y5:
December 31
20Y720Y620Y5
Total assets$221,000 $199,000 $177,000
Notes payable (8% interest)70,000 70,000 70,000
Common stock28,000 28,000 28,000
Preferred 5% stock, $100 par14,000 14,000 14,000
(no change during year)
Retained earnings70,600 53,100 42,000
The 20Y7 net income was $18,200, and the 20Y6 net income was
$11,800. No dividends on common stock were declared between 20Y5
and 20Y7. Preferred dividends...
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for...
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
$320,000
$288,000
$256,000
Notes payable (8% interest)
110,000
110,000
110,000
Common stock
44,000
44,000
44,000
Preferred 6% stock, $100 par
22,000
22,000
22,000
(no change during year)
Retained earnings
117,200
80,880
66,000
The 20Y7 net income was $37,640, and the 20Y6 net income was
$16,200. No dividends on common stock were...
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for...
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
$255,000
$230,000
$205,000
Notes payable (8% interest)
90,000
90,000
90,000
Common stock
36,000
36,000
36,000
Preferred 5% stock, $100 par
18,000
18,000
18,000
(no change during year)
Retained earnings
94,500
68,025
54,000
The 20Y7 net income was $27,375, and the 20Y6 net income was
$14,925. No dividends on common stock were...
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for...
Profitability Ratios
The following selected data were taken from the financial
statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and
20Y5:
December 31
20Y720Y620Y5
Total assets$221,000 $199,000 $177,000
Notes payable (8% interest)70,000 70,000 70,000
Common stock28,000 28,000 28,000
Preferred 5% stock, $100 par14,000 14,000 14,000
(no change during year)
Retained earnings70,600 53,100 42,000
The 20Y7 net income was $18,200, and the 20Y6 net income was
$11,800. No dividends on common stock were declared between 20Y5
and 20Y7. Preferred dividends...
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for...
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
$254,000
$229,000
$204,000
Notes payable (8% interest)
80,000
80,000
80,000
Common stock
32,000
32,000
32,000
Preferred 5% stock, $100 par
16,000
16,000
16,000
(no change during year)
Retained earnings
88,275
60,850
48,000
The 20Y7 net income was $28,225, and the 20Y6 net income was
$13,650. No dividends on common stock were...
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for...
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
$172,000
$155,000
$138,000
Notes payable (8% interest)
60,000
60,000
60,000
Common stock
24,000
24,000
24,000
Preferred 7% stock, $100 par
12,000
12,000
12,000
(no change during year)
Retained earnings
73,725
51,135
36,000
The 20Y7 net income was $23,430, and the 20Y6 net income was
$15,975. No dividends on common stock were...
The following selected data were taken from the financial statements of Vidahill Inc. for December 31,...
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
$268,000
$241,000
$214,000
Notes payable (8% interest)
90,000
90,000
90,000
Common stock
36,000
36,000
36,000
Preferred 3% stock, $100 par
18,000
18,000
18,000
(no change during year)
Retained earnings
100,665
69,485
54,000
The 20Y7 net income was $31,720, and the 20Y6 net income was
$16,025. No dividends on common stock were declared between...
The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5:
Profitability RatiosThe following selected data were taken from the financial
statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and
20Y5:December 3120Y720Y620Y5Total assets$321,000$289,000$257,000Notes payable (8% interest)110,000110,000110,000Common stock44,00044,00044,000Preferred 7% stock, $100 par22,00022,00022,000(no change during year)Retained earnings113,65083,49066,000The 20Y7 net income was $31,700, and the 20Y6 net income was
$19,030. 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'...
The following selected data were taken from the financial statements of Squiggle Group Inc. for December...
The following selected
data were taken from the financial statements of Squiggle Group
Inc. for December 31, 2016, 2015 and 2014:
December 31
2016
2015
2014
Total assets
$294,000
$265,000
$236,000
Notes payable (10% interest)
100,000
100,000
100,000
Common stock
40,000
40,000
40,000
Preferred 6% stock, $100 par
20,000
20,000
20,000
(no change during year)
Retained earnings
93,395
73,850
60,000
The 2016 net income
was $20,745, and the 2015 net income was $15,050. No dividends on
common stock were declared...
Return Ratios and Leverage The following selected data are taken from the financial statements of Redwood...
Return Ratios and
Leverage
The following selected data
are taken from the financial statements of Redwood
Enterprises:
Sales revenue
$649,000
Cost of goods sold
363,000
Gross profit
$286,000
Selling and administrative expense
100,000
Operating income
$186,000
Interest expense
50,000
Income before tax
$136,000
Income tax expense (40%)
54,400
Net income
$81,600
Accounts payable
$45,000
Accrued liabilities
70,000
Income taxes payable
10,000
Interest payable
25,000
Short-term loans payable
150,000
Total current liabilities
$300,000
Long-term bonds payable
$500,000
Preferred stock, 10%, $100...
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