Maggie’s Skunk Removal Corp.’s 2018 income statement listed netsales of $12.6 million, gross profit of...

Maggie’s Skunk Removal Corp.’s 2018 income statement listed net sales of $12.6 million, gross profit of $7.10 million, EBIT of $5.7 million, net income available to common stockholders of $3.3 million, and common stock dividends of $1.3 million. The 2018 year-end balance sheet listed total assets of $52.6 million and common stockholders' equity of $21.1 million with 2.0 million shares outstanding.

Calculate the return on assets. (Round your answer to 2 decimal places.) Calculate the return on equity. (Round your answer to 2 decimal places.) Calculate the dividend payout. (Round your answer to 2 decimal places.)

Solutions

Expert Solution

Part A:

Ret On Assets = Net Income / Total Assets

Particulars	Amount
Net Income	$ 33,00,000.00
Assets	$ 5,26,00,000.00

Return on Assets = Net Income / Assets
= 3300000 / 52600000
= 0.0627
I.e 6.27 %

Part B:

Ret On Equity= Net Income / Equity

Particulars	Amount
Net Income	$ 33,00,000.00
Equity	$ 2,11,00,000.00

Return on Equity = Net Income / Equity
= 3300000 / 21100000
= 0.1564
I.e 15.64 %

jeff jeffy answered 2 years ago

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