EBK CFIN
EBK CFIN
6th Edition
ISBN: 9781337671743
Author: BESLEY
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 2, Problem 9PROB
Summary Introduction

To determine: Return on Equity and Net Income

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At the beginning of the year, the net assets of Shannon Co. were $617,900. The only transactions affecting stockholders’ equity during the year were net income of $60,800 and dividends of $16,600.Required:Calculate Shannon Co.’s return on equity (ROE) % for the year.
The balance sheet for Panoramic Open Pictures (POP) shows $300,000 in total assets and $200,000 in total liabilities. POP's return on assets (ROA) is 5 percent. Compute POP's (a)net income for the year and (b) its return on equity (ROE) POP has no preferred stock.
Firm L had net assets at the end of the year of $415,000. The only transactions affecting stockholders’ equity during the year were net income of $58,000 and dividends of $28,000.Required: Calculate Firm L’s average stockholders’ equity and return on equity (ROE).
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