The following info is for Johnson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.
Assets:
Cash and short-term investments $40,000
Accounts receivable (net) 25,000
Inventory 20,000
Property, plant and equipment 210,000
Total assets $295,000
Liabilities and stockholders equity:
Current liabilities $60,000
Long term liabilities 85,000
Stockholders equity -common 150,000
Total liabilities and stockholders equity $295,000
Income Statement:
Sales Revenue $85,000
Cost of goods sold 45,000
gross margin 40,000
Operating expenses 20,000
Net income 20,000
Number of shares of common stock 6,000
Market price of common stock $20
Dividends per share on common stock 0.90
cash provided by operations $30,000
What is the return on assets for this company?
A. 10.0%
B. 26.7%
C. 11.7%
D. 6.8%
Return on assets = Net income /Average total assets = 20,000/295,000 = 6.8% Option D is the answer Comment if you face any issues |
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The following info is for Johnson Company. Assume that all balance sheet amounts represent both average...
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