Shown below is the liabilities and stockholders equity section of the balance sheet for Flounder Company and Culver Company Each has assets totaling $4,395,000 Flounder Co CulverCo Current liabilities $317,000 Current liabilities $477,000 Long term debt, 10 1,230,000 Common stock ($20 par) 3,150,000 Common stock ($20 par) 2,080,000 Retained earnings (Cash dividends, $358,000) 768,000 Retained earnings (Cash dividends, $221,000) 768,000 $4,395,000 $4,395,000 For the year, each company has earned the same income before interest and taxes Flounder Co Culver Co Income before interest and taxes $1,320,000 $1,320,000 Interest expense 123,000 0 1,197,000 1,320,000 Income taxes (20 ) 239,400 264,000 Net income $957,600 $1,056,000 At year end, the market price of Flounders stock was $101 per share, and Culvers was $63 50 Assume balance sheet amounts are representative for the entire year (a) Calculate the return on total assets (Round answers to 2 decimal places, e g 16 85 ) Return on total assets Flounder Company Culver Company Which company is more profitable in terms of return on total assets Flounder CompanyCulver Company (b) Calculate the return on common stock equity (Round answers to 2 decimal places, e g 16 85 ) Return on common stock equity Flounder Company Culver Company Which company is more profitable in terms of return on common stockholders equity Flounder CompanyCulver Company (c) Calculate the Net income per share (Round answers to 2 decimal places, e g $6 85 ) Net income per share Flounder Company $ Culver Company $ Which company has the greater net income per share of stock Neither company issued or reacquired shares during the year Flounder CompanyCulver Company (d1) From the point of view of net income, is it advantageous to the stockholders of Flounder Co to have the long term debt outstanding NoYes (e) What is the book value per share for each company (Round answers to 2 decimal places, e g $6 85 ) Book value per share Flounder Company $ Culver Company $

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Shown below is the liabilities and stockholders equity section of the balance sheet for Flounder Company and Culver Company. Each has assets totaling $4,395,000. Flounder

Shown below is the liabilities and stockholders equity section of the balance sheet for Flounder Company and Culver Company. Each has assets totaling $4,395,000.

Flounder Co.		CulverCo.
Current liabilities	$317,000	Current liabilities	$477,000
Long-term debt, 10%	1,230,000	Common stock ($20 par)	3,150,000
Common stock ($20 par)	2,080,000	Retained earnings (Cash dividends, $358,000)	768,000
Retained earnings (Cash dividends, $221,000)	768,000
	$4,395,000		$4,395,000

For the year, each company has earned the same income before interest and taxes.

	Flounder Co.	Culver Co.
Income before interest and taxes	$1,320,000	$1,320,000
Interest expense	123,000	0
	1,197,000	1,320,000
Income taxes (20%)	239,400	264,000
Net income	$957,600	$1,056,000

At year-end, the market price of Flounders stock was $101 per share, and Culvers was $63.50. Assume balance sheet amounts are representative for the entire year. (a) Calculate the return on total assets? (Round answers to 2 decimal places, e.g. 16.85%.)

	Return on total assets
Flounder Company		%
Culver Company		%

Which company is more profitable in terms of return on total assets? Flounder CompanyCulver Company (b) Calculate the return on common stock equity? (Round answers to 2 decimal places, e.g. 16.85%.)

	Return on common stock equity
Flounder Company		%
Culver Company		%

Which company is more profitable in terms of return on common stockholders equity? Flounder CompanyCulver Company (c) Calculate the Net income per share. (Round answers to 2 decimal places, e.g. $6.85.)

		Net income per share
Flounder Company		$
Culver Company		$

Which company has the greater net income per share of stock? Neither company issued or reacquired shares during the year. Flounder CompanyCulver Company (d1) From the point of view of net income, is it advantageous to the stockholders of Flounder Co. to have the long-term debt outstanding? NoYes (e) What is the book value per share for each company? (Round answers to 2 decimal places, e.g. $6.85.)