Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Data from the financial statements of Oriental Candle Company included the following: (Click the icon to view the data.) Read the requirements. Requirements 1.

image text in transcribed

Data from the financial statements of Oriental Candle Company included the following: (Click the icon to view the data.) Read the requirements. Requirements 1. Calculate the following ratios: a. Net profit margin; b. Asset turnover ratio; c. Leverage ratio; d. Return on assets (ROA); e. Return on equity (ROE). a. Begin by selecting the formula labels and then enter the amounts to calculate net profit margin. (Round your answer to one decimal place, X.X%.) Net profit margin ratio % b. Select the formula labels and then enter the amounts to calculate the asset turnover ratio. (Round your answer to one decimal place, X.X.) Asset turnover ratio Data table c. Select the formula labels and then enter the amounts to calculate the leverage ratio. (Round your answer to one decimal place, X.X.) Leverage ratio Average total assets $ 50,000 Average common stockholders' equity Net sales 25,000 250,000 11,000 d. Select the formula labels and then enter the amounts to calculate return on assets (ROA). (Round your answer to one decimal place, X.X%.) Net income The company had no preferred stock. ROA % e. Select the formula labels and then enter the amounts to calculate return on equity (ROE). (Round your answer to one decimal place, X.X%.) ROE % Requirement 2. Which is higher, ROA or ROE? Does this make sense for stockholders? Why or why not? Both ROA and ROE are Shareholders prefer a return on equity than return on assets. Shareholders should be with this return. Print Done

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Managerial Accounting Concepts

Authors: Edmonds, Tsay, olds

6th Edition

978-0078110894

Students also viewed these Accounting questions

Question

How does selection differ from recruitment ?

Answered: 1 week ago