Tempo Services, Inc., reported these figures for 19X7 and 19X6:

Compute rate of return on total assets and rate of return on common stockholders' equity for 19X7. Do these rates of return suggest strength or weakness? Give your reason.

Transcribed Image Text:

Income statement: Interest expense. Net income Balance sheet: Total assets. Preferred stock, $1.30, no-par, 100,000 shares issued and outstanding.. Common stockholders' equity Total stockholders' equity...... 19X7 19X6 $ 7,400,000 $ 7,100,000 22,000,000 18,700,000 351,000,000 317,000,000 2,500,000 2,500,000 164,000,000 151,000,000 166,500,000 153,500,000