Using Information in the Income Statement and Balance Sheets Below

question 9

Essay

Using information in the income statement and balance sheets below, determine the missing amounts. Calculate the debt-to-assets ratio as of December 31, 2011. Calculate the asset turnover ratio and the net profit margin ratio for the year 2011.

Calculate the effect of cumulative dividends from the previous year on current year’s dividends payable to common stockholders.

Understand the concepts of cumulative and non-cumulative preferred stock and their impact on dividends.

Calculate the dividends to be paid to preferred stock and common stockholders.

Calculate the financial consequences of buying and selling stocks, including gains or losses.

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Definitions:

Demand

The desire for a particular good or service combined with the ability and willingness to pay for it.

Emergent Property

A characteristic or phenomenon that arises from the interaction and organization of individual components in a system, not predictable from the properties of the individual parts.

Market Equilibrium

The point at which the quantity of goods supplied equals the quantity demanded at a particular price.

Emergent Equilibria

The spontaneous attainment of stability within a complex system where individual components interact and adjust to changing conditions without central control.