Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Y7

Profitability Ratios

The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5:

December 31
20Y7 20Y6 20Y5
Total assets $319,000 $287,000 $255,000
Notes payable (8% interest) 110,000 110,000 110,000
Common stock 44,000 44,000 44,000
Preferred 3% stock, $100 par 22,000 22,000 22,000
(no change during year)
Retained earnings 123,360 89,570 66,000

The 20Y7 net income was $34,450, and the 20Y6 net income was $24,230. No dividends on common stock were declared between 20Y5 and 20Y7. Preferred dividends were declared and paid in full in 20Y6 and 20Y7.

a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders equity for the years 20Y6 and 20Y7. When required, round to one decimal place.

20Y7 20Y6
Return on total assets fill in the blank 1 % fill in the blank 2 %
Return on stockholders equity fill in the blank 3 % fill in the blank 4 %
Return on common stockholders equity fill in the blank 5 % fill in the blank 6 %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Accounting Concepts And Applications

Authors: K. Fred Skousen, W. Steve Albrecht, James D. Stice, Earl K. Stice

7th Edition

0538876247, 978-0538876247

More Books

Students also viewed these Accounting questions

Question

What conflicts of interest had to be resolved?

Answered: 1 week ago