Profitability Analysis for Fairall Corp.

For the year ended September 26, 2015, Fairall Corporation reported net income of $2,680 million. Total shareholders' equity on this date was $18,088 million, and on September 27, 2014, it was $19,833 million. No preferred stock was outstanding in either year.

Required:

1. Compute Fairall's return on common stockholders' equity for the year ended September 26, 2015. Round your answer to two decimal places. fill in the blank 1 %

2. What other ratio would you want to compute to decide whether Fairall is successfully employing leverage?

A. Asset turnover ratio, because the excess of return on equity over the assets turnover ratio indicates if management has been successful in employing leverage.

B. Profitability ratio, because the excess of return on assets over the profitability ratio indicates if management has been successful in employing leverage.

C. Return on assets ratio, because the excess of return on equity over the return on assets indicates if management has been successful in employing leverage.

D. Return on assets ratio, because the excess of return on assets ratio over the return on equity indicates if management has been successful in employing leverage.