Question
Lindas Clothing is a retailer of contemporary womens clothing. Selected financial information for Lindas appears below: 2011 2010 2009 2008 Net Income $ 56,759 $
Lindas Clothing is a retailer of contemporary womens clothing. Selected financial information for Lindas appears below:
| 2011 | 2010 | 2009 | 2008 |
Net Income | $ 56,759 | $ 31,150 | $ 15,375 | $14,750 |
Total Assets at year-end | $381,500 | $246,250 | $145,490 | $71,268 |
Weighted Average number of shares |
|
|
|
|
Outstanding | 84,215 | 80,546 | 77,965 | 75,888 |
Total Liabilities at year-end | 205,967 | 119,657 | 60,522 | 17,623 |
Common Stockholders' Equity at year-end | $175,533 | $126,593 | $ 84,968 | $53,645 |
Interest Expense | 165 | 195 | 258 | 368 |
Required:
a. | Compute the rate of return on assets for the years 2009-2011. Lindas has an effective tax rate of 35%. |
b. | Compute the rate of return on common shareholders equity for the years 2009-2011. |
c. | Compute basic earnings per share for the years 2009-2011. |
d. | Interpret the changes in ROA versus ROCE and EPS over the three-year period. |
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