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The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were
The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.
Assets | |
Cash and short-term investments | $30,000 |
Accounts receivable (net) | 20,000 |
Inventory | 15,000 |
Property, plant, and equipment | 185,000 |
Total Assets | $250,000 |
Liabilities and Stockholders' Equity | |
Current liabilities | $45,000 |
Long-term liabilities | 70,000 |
Common stock | 80,000 |
Retained earnings | 55,000 |
Total liabilities and stockholders' equity | $250,000 |
Income Statement | |
Sales | $85,000 |
Cost of goods sold | 45,000 |
Gross margin | $40,000 |
Operating expenses | (15,000) |
Interest expense | (5,000) |
Net income | $20,000 |
Number of shares of common stock outstanding | 6,000 |
Market price of common stock | $20 |
Total dividends paid | $9,000 |
Cash provided by operations | $30,000 |
What is the return on total assets for Diane Company?
a.10.0%
b.8.0%
c.0.10%
d.1.0%
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