The Following Information Pertains to Ortiz Company What Is the Return on Assets for Ortiz?
A) 6

question 156

Multiple Choice

The following information pertains to Ortiz Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. $\begin{array}{lr}\text { Assets }\\\text { Cash and short-term investments } & \$ 45,000 \\\text { Accounts receivable (net) } & 30,000 \\\text { Inventory } & 40,000 \\\text { Property, plant and equipment } & 310,000 \\\quad \text { Total Assets } & \$ 425,000\\\\\text { Liabilities and Stockholders' Equity }\\\text { Current liabilities } & \$ 55,000 \\\text { Long-term liabilities } & 110,000 \\\text { Stockholders' equity?Common } & 260,000 \\\quad \text { Total Liabilities and Stockholders' Equity } & \underline{\$ 425,000}\end{array}$ $\begin{array}{lr}\text { Income Statement }\\\text { Sales } & \$ 120,000 \\\text { Cost of goods sold } & 65,000 \\\text { Gross profit } & 55,000 \\\text { Operating expenses } & 29,500 \\\quad \text { Net income } & 25,500 \\\\\text { Number of shares of common stock } & 6,000 \\\text { Market price of common stock } & \$ 20 \\\text { Dividends per share } & .50\end{array}$ What is the return on assets for Ortiz?

• A) 6.0%
• B) 5.0%
• C) 10.0%
• D) 12.0%

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Definitions:

Underground Transactions

Economic activities that occur outside of the formal economy and are not reported to government agencies, often to avoid taxes or regulation.

Price Floor

A government or regulatory minimum price set above the equilibrium price, intended to ensure market participants receive a fair return.

Moral Argument

A rationale based on ethical principles and values to persuade or justify particular actions or beliefs.

Political Argument

A reasoned discourse or debate focused on a specific political issue, policy, or idea.