Breaktown Company Had Net Income of $175,000 and Net Sales

question 155

Essay

Breaktown Company had net income of $175,000 and net sales of $625,000 in 2010. The company's total assets for 2009/2010 averaged $4,000,000. Its common stockholders' equity for the period averaged $2,340,000. Calculate (a) profit margin, (b) return on assets, and (c) return on common stockholders' equity.

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Definitions:

Full Production

The level of production at which an economy or firm operates at maximum capacity, utilizing all available resources efficiently without waste.

Technology

The application of scientific knowledge for practical purposes, especially in industry and improvements in tools, machinery, and software.

Full Employment

Describes a situation where all available labor resources are being used in the most economically efficient way, typically with very low unemployment.

Production Possibilities Frontier

A diagram displaying the peak output scenarios for two different goods, given certain resources and influencing factors.