Consider the following financial data for Northgate Corporation ($ in millions): ● Cash and marketable securities,...
Consider the following financial data for Northgate Corporation ($ in millions):
● Cash and marketable securities, $100
● Total fixed assets, $280
● Annual sales, $1,200
● Net income, $358
● Inventory, $180
● Current liabilities, $134
● Current ratio, 3.2
● Average correction period, 45 days
● Average common equity, $500
Based on these financial data, determine the firm’s return on (common) equity.
Homework Answers
Return on common equity measure the management's ability to generate income from common equity.High return on equity means high performance of company.It is calculated for common stockholder .
=Net income - preferred dividend/Average common equity
=358/500*100
=71.6%
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Consider the following financial data for Northgate Corporation
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