Question

Can someone help me with this one? I need the following

25. Use the information shown to calculate the following ratios for Allen Ales in 2018: asset turnover, return on total assets, return on stockholders' equity, and return on common stockholders' equity. The company paid $2,500 in preferred dividends for the year. Round ratios to one decimal place. $345,900 15,700 275,300 67,500 68,300 Sales Interest expense Net income Long-term investments: Beginning of year End of year Total assets: Beginning of year End of year Common stockholders' equity: Beginning of year End of year Total stockholders' equity: Beginning of year End of year 104,750 108,300 27,200 28,450 36,900 39,200

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•Asset Turnover:

•Return on total assets:

•Return on stockholders’ equity:

•Return on common stockholders’ equity:

•EPS on common stock:

•P/E Ratio:

•Dividends per share:

•Dividend yield:

Answer 1

(1)

Total assets turnover = sales/average total assets

= $345900/$106525

= 3.25 times

Where,

Average total assets = (beginning total assets + ending total assets)/2

= ($104750 + $108300)/2 = $106525

(2)

Return on assets = net income/average total assets

= $275300/$106525

= 258.44%

(3)

Return on equity = net income/average shareholders equity

= $275300/$38050

= 723.52%

Where,

Average shareholders equity = ($36900 + $39200)/2

= $38050

(4)

Return on common stockholders equity = net income available for common stockholders/average common stockholders equity

Net income available for common stockholders = net income - preferred dividends

= $275300 - $2500 = $272800

Average common stockholders equity = ($27200 + $28450)/2 = $27825

Therefore,

Return on common stockholders equity = $272800/$27825

= 980.41%