takeAssignmenttakeAssignmentMaindoinvokerassignmentstakeAssi

takeAssignment/takeAssignmentMain.do?invoker-assignments&takeAssignmentSessionlocator-assignment-take;&inprogress-fs; Caiculator Measures of liquidity, Solvency and Profitability The Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 Net income Total Dividends: $5,375,000 900,000 $6,275,000 $4,545,000 925,000 $5,470,000 $45,000 $45,000 50,000 $95,000 $5,375,000 50,000 Common stock dividends Total dividends Retained earnings, December 31 $6,180,000 Stargel Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1

Solution

12.

Return on total assets = EBIT/Avg. total assets

                                        = ($ 900,000 + $ 170,000 + $ 230,000)/ ($ 9780000 + $ 8755000)/2

                                        = $ 1,300,000/ (18,535,000)/2

                                        = $ 130,000/ $ 9,267,500 = 0.12409 or 12.4 %

13.

Return on stock holders equity = Net income/Avg. stockholder’s equity

                                                        = $ 9,000,000 / ($ 7,180,000 + $ 6,375,000)/2

                                                         = $ 9,000,000 / ($ 13,555,000/2)

                                                         = $ 9,000,000 / $ 6,777,500

                                                         = 0.132792 or 13.3 %