Question

Hi,

I am requesting your help in Average Common SE and Rate of return on common stockholder’s. equity. Can you explain this?

Thank you,

Michelle

SD-9 (similar to) Balance Sheets Triumph's Companies, a home mprowe hain m(Click the icon to view the halance sheots mph's has 100.000 common shares outstanding during 2018. Triumph's Companies Read the requirements Balance Sheet May 31, 2018 and 2017 Requirement 1. Compute the profit margin ratio for Triumph's Companies for 2018 Liabilities Assets he profit margin raio t Begin by selecting the formula to caloulate Triumph's Companies profit margin ratio. Then enter the amounts and caloulste 2018 2017 2018 2017 Profit margin ratio Nel sales Net income Total Current Lisbilites Cash 2.500 $ 1,800 d,000 5 30.7 abilities 13.000 42.400 Short-tem investments Total Lisbilities 38,300 a, 100 Requirement 2. Compute the rate of return on total assets for 2018 Marghandse inventory Stockholders' Equity 7,000 6.300 2.300 Common Stock Begin by selecting the formula to caloulate Triumph's Companies rate of return on total assets. Then enter the amounts and calculate the rate of o 10.000 13,000 13.000 Other Currant Assets 18.000 33,800 Average total assets Retained Earnings Total Current Asaut Net income Interest expense Rate of return on total assets ee.100 30.100 46.800 31,000 20.000 24.000 Total Equity 19 1 ALQiher Assets 0 000 13,000 and 85,100 $ 54,100 as,100 $ 54,100 Totai Linbilines and Equity Toda Aeate Requirement3. Compute the asset turnover ratio for 2018 amounts and caloulate the assets turnover r Begin by salecting the formula to caloulate Triumph's Companies' asset turnover ratio, Then enter the Print Done Average total assets Asset turnover ratin et sales 0.01 09.000 42.400 s Requirement 4. Compute the rate of return on common stockholders equity for 2018 the rate of return on oommon stogkhplderst equity for 2018. (Abbreviation used: Avg common SE average common stockholders equity Complete al O va Bme ur an i d N return on common stookholders equity Then enter the ameunts Rate of return on common Preferred dividends Avg. common SE stockholders' equity Net income 13,000 9 nter any number in the edit fields and then click Check Answer | Triumph's Companies, a home improvement store chain, reported the following summarized figures: EEE (Click E(Click the loon to view the balance sheets e ioon to view the income statement) Triumph's has 100.000 common shares outstanding during 2018. X e ggouirements Read Income Statement Requirement 1, Compute the profit margin ratio for Triumph's Companies for 2018. 2018. (Rou caloulate profit margin ratio amounts formula to caloulate Triumph's Companies' proft margin ratio. Then enter Begin by selecting th Triumph's Companies Net sales Profit margin ratio Income Statement Net income 42 400 30.7 Years Ended May 31, 2018 and 2017 13.000 2017 2018 Requirement 2. Compute the rate of return on total assets for 2018. 2.400 $ 41.100 Net Sales Revenuer 23 300 23,700 formula to calculate Triumph's Companies rate of returm on total assets. Then enter the amounts and calculate the rate of retum on total a selecting Cost of Goods Sold Begin 300 Rate of retun on total assets Average total assets Interest Expense Interest expense ar Net income 10.1 oo.000 All Other Expenses 300 13,000 10,160 13,000 Net ncome Requirement 3. Compute the asset turnover ratio for 2018 or 2018. a formula to caloulate Triumph's Companies' asset turnover ratio. Then enter the amounts and ealeulate the asseets turnover ratio Begin by seleating Print Done Asset turnover rato Average total assets Net sales 0.81 69.800 42.400 s Requirement 4. Compute the rate of return on common stockholders' equity for 2018 e formula to calculate Thumpts Compa returm on common stockhoiderss equity Then enter the amounts and calculate the rate of retur on stockhoiders equity for 2018. (Abbreviation used: Avg. common SE average common stookholder Begin by selecting with a zero value Round your ans Rate of return on common stockholders' equity Avg common SE Preferred dividends incame 3 000

Answer 1

4.

(Net income	-	Preferred dividends)	/	Avg. common SE	=	Rate of return on common stockholders' equity
							(13000	-	0)	/	38900	=	33.4%

Average common stockholders' equity = (Beginning common SE + Ending common SE)/2 = ($31000 + $46800)/2 = $77800/2 = $38900