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Ralph Lauren Corporation (RL) sells apparel through company-owned retail stores. Financial information for Ralph Lauren follows (in thousands): Fiscal Year 3 Fiscal Year 2 Net
Ralph Lauren Corporation (RL) sells apparel through company-owned retail stores. Financial information for Ralph Lauren follows (in thousands): Fiscal Year 3 Fiscal Year 2 Net income $396,400 $702,200 Interest expense 21,000 16,700 Fiscal Year 3 Fiscal Year 2 Fiscal Year 1 Total assets (at end of fiscal year) $6,213,100 $6,106,000 $6,088,000 Total stockholders' equity (at end of fiscal year) 3,743,500 3,891,000 4,034,000 Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders' equity is 15.0% for the year ended April 2, Year 3. a. Determine the return on total assets for Ralph Lauren for fiscal Years 2 and 3. Round to one decimal place. Fiscal Year 3 fill in the blank 1 % Fiscal Year 2 fill in the blank 2 % b. Determine the return on stockholders equity for Ralph Lauren for fiscal Years 2 and 3. Round to one decimal place. Fiscal Year 3 fill in the blank 3 % Fiscal Year 2 fill in the blank 4 % c. The return on stockholders' equity is the return on total assets due to the use of leverage. d. During fiscal Year 3, Ralph Laurens results were compared to the industry average. The return on total assets for Ralph Lauren was than the industry average. The return on stockholders equity was than the industry average. These relationships suggest that Ralph Lauren has leverage than the industry, on average
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