The following comprehensive assessment is based on a continuing case study of Insignia Corporation Limited. The following financial statements have been provided: Insignia Corporation Limited Income Statement For the years ended December 31, 2019 & 2020 2019 2020 ('000s) 900,000 (350,000) (75,000) (65,000) (55,000) 355,000 ("000s) 1035,000 (400,000) (80,000) (75,000) (60,000) 420,000 Sales Cost of Goods Sold Selling & Marketing Costs Admin. Expenses Depreciation Expense Earnings before Interest & Taxes Interest Expense (25,000) 330,000 (30,000) 390,000 Taxable Income Taxation (30%) (99,000)| 231,000 (117,000) 273,000 Net Income Dividends (40%) Addition to Retained Earnings 109,200 163,800 92,400 138,600
The following comprehensive assessment is based on a continuing case study of Insignia Corporation Limited. The following financial statements have been provided: Insignia Corporation Limited Income Statement For the years ended December 31, 2019 & 2020 2019 2020 ('000s) 900,000 (350,000) (75,000) (65,000) (55,000) 355,000 ("000s) 1035,000 (400,000) (80,000) (75,000) (60,000) 420,000 Sales Cost of Goods Sold Selling & Marketing Costs Admin. Expenses Depreciation Expense Earnings before Interest & Taxes Interest Expense (25,000) 330,000 (30,000) 390,000 Taxable Income Taxation (30%) (99,000)| 231,000 (117,000) 273,000 Net Income Dividends (40%) Addition to Retained Earnings 109,200 163,800 92,400 138,600
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The company’s accountant has indicated that there was a significant decline in Insignia’s return on equity . You are require to compute the company’s Return on Equity using Du Pont Identity for 2019 and 2020, to ascertain the root cause of the decline.
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