According to the
$200,000, account available balance is $500,000, inventory balance is $750,000; the net fixed
asset is $1,500,000. On the other side, the account payable is $250,000, the accrual $40,000, the
notes payable is $300,000, long-term debt is $510,000, common stock is $1,200,000,
earnings
is 25%. Find ROE.
a. 49%
b. 31%
c. 34%
d. 75%
The return on equity is used to evaluate the financial performance of the entity. Then it is a comparison of the net income and stockholders’ equity. The greater the ratio the more beneficial it is for the shareholders because the profit to shareholders is more. The return on equity is the profitability ratio that investor uses while making investment decisions.
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- On January 1, 2020, Pharoah Company, a calendar-year company, issued $2160000 of notes payable, of which $540000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2020, is: O Current liabilities, $540000; Long-term Debt, $1080000. O Current liabilities, $2160000. O Current liabilities, $540000; Long-term Debt, $1620000. O Long-term debt, $2160000.arrow_forwardRising Stars Academy provided the following information on its 2019 Balance Sheet and Statement of Cash Flows: Long-term debt $ 4,400 Interest expense $ 398 Total liabilities 8,382 Net income 559 Total assets 38,775 Interest payments 432 Total equity 29,803 Cash flows from operations 1,015 Operating income 1,223 Income tax expenses 266 Income taxes paid 150 Required: Calculate the following ratios for Rising Stars Academy. Round your answers to three decimal places. a. Debt to equity b. Debt to total assets c. Long-term debt to equity d. Times interest earned (accrual basis) e. Times interest earned (cash basis)arrow_forwardThe 2021 income statement of Adrian Express reports sales of $19,310,000, cost of goods sold of $12,250,000, and net income of $1,700,000. Balance sheet information is provided in the following table. Assets Current assets: Cash Accounts receivable ADRIAN EXPRESS Balance Sheets December 31, 2021 and 2020 2021 Inventory Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity 2020 $ 700,000 $ 860,000 1,600,000 1,100,000 2,000,000 1,500,000 4,900,000 4,340,000 $9,200,000 $7,800,000 $1,920,000 $1,760,000 2,400,000 2,500,000 1,900,000 1,900,000 2,980,000 1,640,000 $9,200,000 $7,800,000 Industry averages for the following profitability ratios are as follows: Gross profit ratio Return on assets Profit margin Asset turnover Return on equity 45% 25% 15% 2.5 times 35% Required: 1. Calculate the five profitability ratios listed above for Adrian Express. (Round your…arrow_forward
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