The Following Financial Statement Information Is Available for Henn Corporation

question 170

Multiple Choice

The following financial statement information is available for Henn Corporation: $\begin{array}{lrr}&2013&2012\\\text { Stockholders' equity - common } & \$ 330,000 & \$ 270,000 \\\text { Net sales } & 784,000 & 697,000 \\\text { Cost of goods sold } & 406,000 & 377,000 \\\text { Net income } & 112,000 & 80,000 \\\text { Inc tax expense } & 48,000 & 29,000 \\\text { Interest expense } & 14,000 & 14,000\\\text { Dividends paid to preferred }\\\text { stockholders }& 22,000 & 20,000 \\\text { Dividends paid to common } \\\text { stockholders }& 15,000 & 10,000\end{array}$ The return on common stockholders' equity for 2013 is

• A)25.0%.
• B)37.3%.
• C)27.3%.
• D)30.0%.

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Definitions:

Slope

The slope of a line is the numerical value for the inclination or declination of that line and is expressed as a ratio of the change in the vertical variable over the change in the horizontal variable from one point on the line to the next.

BTU Rating

A measurement of thermal energy that indicates the heat output of an appliance or heating system, where one BTU represents the amount of energy needed to raise the temperature of one pound of water by one degree Fahrenheit.

Level of Insulation

The extent or thickness of insulating materials used in a structure to reduce heat transfer and improve energy efficiency.

Exposure

The extent to which an individual or organization is open to risk, often financially or in terms of health and safety.