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Shareholders' Equity:
Preferred Stock $\$ .10$ Par Value; 100 Shares Authorized, None Issued)
Common Stock

question 10

Essay

$\begin{array} { l r r } \text { Long-term debt } & 7,709 & 8,508 \\ \text { Long-tern obligations under capital leases } & 2,307 & 2,092 \\ \text { Deferred income taxes and other } & 463 & 400 \\ \text { Minority interest } & 1,025 & 331 \end{array} Shareholders' equity: Preferred stock ( \$ .10 par value; 100 shares authorized, none issued) Common stock ( \$ .10 par value; 5,500 shares authorized, 2,285 and \begin{array}{lrr} 2,293 \text { issued and outstanding in X6 and X7, respectively) } & 228 & 229 \\ \text { Capital in excess of par value } & 547 & 545 \\ \text { Retained earnings } & 16,768 & 14,394 \\ \text { Foreign currency translation adjustment } & \underline{(400)}&\underline{(412)} \\ \quad \text { Total shareholders' equity }&\underline{17,143}&\underline{14,756} \\ \text { Total liabilities and shareholders' equity }& \underline{\$ 39.604} & \underline { \$ 37.541} \end{array} a. Calculate return on common equity (ROCE) for fiscal X4 and X7. Identify, as far as allowed by the data, components driving any changes in ROCE from X4 to X7. (If you want to give students more guidance then ask to disaggregate ROCE into net operating profit margin, net operating asset turnover and leverage.) b. Compare and contrast the change in earnings per share to ROCE over this time period.$ $\begin{array} { l r r } \text { Long-term debt } & 7,709 & 8,508 \\ \text { Long-tern obligations under capital leases } & 2,307 & 2,092 \\ \text { Deferred income taxes and other } & 463 & 400 \\ \text { Minority interest } & 1,025 & 331 \end{array} Shareholders' equity: Preferred stock ( \$ .10 par value; 100 shares authorized, none issued) Common stock ( \$ .10 par value; 5,500 shares authorized, 2,285 and \begin{array}{lrr} 2,293 \text { issued and outstanding in X6 and X7, respectively) } & 228 & 229 \\ \text { Capital in excess of par value } & 547 & 545 \\ \text { Retained earnings } & 16,768 & 14,394 \\ \text { Foreign currency translation adjustment } & \underline{(400)}&\underline{(412)} \\ \quad \text { Total shareholders' equity }&\underline{17,143}&\underline{14,756} \\ \text { Total liabilities and shareholders' equity }& \underline{\$ 39.604} & \underline { \$ 37.541} \end{array} a. Calculate return on common equity (ROCE) for fiscal X4 and X7. Identify, as far as allowed by the data, components driving any changes in ROCE from X4 to X7. (If you want to give students more guidance then ask to disaggregate ROCE into net operating profit margin, net operating asset turnover and leverage.) b. Compare and contrast the change in earnings per share to ROCE over this time period.$ $\begin{array} { l r r } \text { Long-term debt } & 7,709 & 8,508 \\ \text { Long-tern obligations under capital leases } & 2,307 & 2,092 \\ \text { Deferred income taxes and other } & 463 & 400 \\ \text { Minority interest } & 1,025 & 331 \end{array}$
Shareholders' equity:
Preferred stock ( $\$ .10$ par value; 100 shares authorized, none issued)
Common stock ( $\$ .10$ par value; 5,500 shares authorized, 2,285 and
$\begin{array}{lrr}2,293 \text { issued and outstanding in X6 and X7, respectively) } & 228 & 229 \\\text { Capital in excess of par value } & 547 & 545 \\\text { Retained earnings } & 16,768 & 14,394 \\\text { Foreign currency translation adjustment } & \underline{(400)}&\underline{(412)} \\\quad \text { Total shareholders' equity }&\underline{17,143}&\underline{14,756} \\\text { Total liabilities and shareholders' equity }& \underline{\$ 39.604} & \underline { \$ 37.541} \end{array}$

a. Calculate return on common equity (ROCE) for fiscal X4 and X7. Identify, as far as allowed by the data, components driving any changes in ROCE from X4 to X7. (If you want to give students more guidance then ask to disaggregate ROCE into net operating profit margin, net operating asset turnover and leverage.)

b. Compare and contrast the change in earnings per share to ROCE over this time period.

Definitions:

Vertical Axis

In graph theory and visuals, the vertical axis is typically the y-axis, representing dependent variables or metrics that can be measured against the independent variables on the horizontal axis.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, quantitatively defined as the percentage change in quantity demanded divided by the percentage change in price.

Equilibrium Values

The set of prices or quantities at which markets or economies reach a balance between supply and demand.

Intercept Coefficient

The value of the dependent variable when all independent variables in a regression model are equal to zero.

Shareholders' Equity: Preferred Stock $.10\$ .10$.10 Par Value; 100 Shares Authorized, None Issued) Common Stock

Definitions:

Shareholders' Equity:
Preferred Stock $\$ .10$ Par Value; 100 Shares Authorized, None Issued)
Common Stock