3)a. How does the rate earned on total assets differ from the rate earned on stockholders' equity?

b. Which ratio is normally higher? Explain.

4)The net income (after income tax) of McCants Inc. was $40 per common share in the latest year and $100 per common share for the preceding year. At the beginning of the latest year, the number of shares outstanding was doubled by a stock split. There were no other changes in the amount of stock outstanding. What were the earnings per share in the preceding year, adjusted for comparison with the latest year?

5) Describe two reports provided by independent auditors in the annual report to shareholders.