Selected Data from Decco Company Are Presented Below Instructions
Calculate the Profitability Ratios That Can Be Computed from l

question 148

Essay

Selected data from Decco Company are presented below: $$\begin{array} { l r } \text { Total assets } & \$ 1,600,000 \\\text { Average assets } & 2,000,000 \\\text { Net income } & 380,000 \\\text { Net sales } & 1,500,000 \\\text { Average common stockholders' equity } & 1,000,000\end{array}$$ Instructions
Calculate the profitability ratios that can be computed from the above information.

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Definitions:

Reward To Risk Ratio

A metric used by investors to compare the expected returns of an investment to the amount of risk undertaken to capture these returns.

Risk Premium

The additional return expected by an investor for taking a higher risk.

Risk-Free Rate

The theoretical return on investment with no risk of financial loss, typically represented by government bonds.

Recessionary Economy

An economic condition characterized by a significant decline in general economic activity over a sustained period.