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Beginning of the Year End of the Year Current assets $62,000 $82,000 Current liabilities 25,000 55,000 Plant and equipment 300,000 350,000 Long-term liabilities 50,000 75,000
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| Beginning of the Year | End of the Year |
|---|---|---|
| Current assets | $62,000 | $82,000 |
| Current liabilities | 25,000 | 55,000 |
| Plant and equipment | 300,000 | 350,000 |
| Long-term liabilities | 50,000 | 75,000 |
| Common shareholders equity | 125,000 | 225,000 |
| Preferred shareholders equity | 60,000 | 85,000 |
Given the following information for Victory Stables, calculate their return on assets, and return on equity and comment on the use of these ratios (why would we use them? what do they tell us?).
| Net income | $50,000 |
| Interest expense | 8,500 |
| Income tax expense | 15,250 |
| Preferred dividends | 2,500 |
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