FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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For the year ended December 31, 2022, Settles Incorporated earned an
Required:
- Calculate Settles Incorporated's margin and net income.
Note: Round "Margin" answer to 1 decimal place. Enter the net income answer in dollars, i.e., $5 million should be entered as 5,000,000.
- Calculate Settles Incorporated's return on equity.
Note: Round your answer to 1 decimal place.
#### Notes:
- The Margin percentage reflects how much profit Settles Incorporated made for each dollar of sales.
- The Net Income in dollars signifies the actual profit made after all expenses.
- Return on Equity (ROE) measures how effectively the company used the equity from its shareholders to earn profits.
Users can input the respective values in the designated fields to comprehend the financial health of Settles Incorporated better.](https://content.bartleby.com/qna-images/question/d2fe6a07-c405-4207-a087-23ef0e82e7a3/f5d7b7e6-8e0d-4ef0-841a-7bd9107d3baa/npun7lc_processed.png)
Transcribed Image Text:### Financial Performance Analysis of Settles Incorporated for FY 2022
For the fiscal year ending on December 31, 2022, Settles Incorporated achieved a Return on Investment (ROI) of 10.5%. The company's total sales for the year amounted to $9 million, and it reported an average asset turnover ratio of 2.1. The average stockholders' equity during the same period was $2.8 million.
**Required Calculations:**
a. **Calculating Margin and Net Income:**
- Margin should be rounded to one decimal place.
- Net income should be entered in dollars. For example, $5 million should be entered as 5,000,000.
b. **Calculating Return on Equity (ROE):**
- The ROE should be rounded to one decimal place.
**Input Fields:**
1. **Margin (%)**:
- (Field for Margin calculation)
2. **Net Income ($)**:
- (Field for Net Income calculation)
3. **Return on Equity (%)**:
- (Field for ROE calculation)
These calculations will assist in evaluating Settles Incorporated's profitability and efficiency in using its equity to generate profits.
#### Notes:
- The Margin percentage reflects how much profit Settles Incorporated made for each dollar of sales.
- The Net Income in dollars signifies the actual profit made after all expenses.
- Return on Equity (ROE) measures how effectively the company used the equity from its shareholders to earn profits.
Users can input the respective values in the designated fields to comprehend the financial health of Settles Incorporated better.
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