Question
Consider the following financial statements. INCOME STATEMENT 2021 2022 Sales $62,200 $60,334 Cost of Goods Sold $37,700 $26,390 Depreciation $4,600 $5,636 EBIT $19,900 $28,308 Interest
Consider the following financial statements.
| INCOME STATEMENT | 2021 | 2022 |
|---|---|---|
| Sales | $62,200 | $60,334 |
| Cost of Goods Sold | $37,700 | $26,390 |
| Depreciation | $4,600 | $5,636 |
| EBIT | $19,900 | $28,308 |
| Interest | $6,400 | $6,912 |
| EBT | $13,500 | $21,396 |
| Tax | $2,835 | $4,493 |
| Net Income | $10,665 | $16,903 |
| Dividends | $2,050 | $10,142 |
| Addition to Retained Earnings | $8,615 | $6,761 |
| BALANCE SHEET | 2021 | 2022 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Cash | $9,400 | $6,580 | Accounts Payable | $15,620 | $23,430 |
| Accounts Receivable | $8,400 | $4,200 | Current Liabilities | $15,620 | $23,430 |
| Inventory | $8,840 | $4,862 | Long-term Debt | $25,600 | $38,400 |
| Current Assets | $26,640 | $15,642 | Total Debt | $41,220 | $41,220 |
| Retained Earnings | $8,200 | $16,815 | |||
| Fixed Assets | $51,800 | $72,520 | Common Stock | $29020 | $9,517 |
| Total Equity | $37220 | $26,332 | |||
| Total Assets | $78,440 | $88,162 | Total Liabilities & Equity | $78,440 | $88,162 |
Calculate ROE for each year.
2021: %
2022: %
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Allowed attempts: 3
Question 2
Use DuPont Analysis to decompose ROE.
- Profit Margin 2021: % 2022: %
- Total Asset Turnover 2021: 2022:
- Equity Multiplier 2021: 2022:
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Financial Accounting
Authors: David Spiceland, Wayne M. Thomas, Don Herrmann
5th edition
1259914895, 978-1259914898
