The Following Selected Data Were Taken from the Financial Statements

question 14

Essay

The following selected data were taken from the financial statements of the Winter Group for the three most recent years of operations: The Year 3 net income was $242,000 and the Year 2 net income was $308,000. No dividends on common stock were declared during the 3 years.​
(a) Determine the return on total assets, the return on stockholders' equity, and the return on
common stockholders' equity for Years 2 and 3. Round to one decimal place.(b) What conclusion can be drawn from these data as to the company's profitability?

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Definitions:

Fair Value

The monetary return from an asset's sale or the expenditure for transferring a liability in an orderly market dialogue on the assigned valuation day.

Stock Issuance Costs

Expenses associated with the process of issuing new stocks in the market, such as legal fees, printing expenses, and commissions.

Financial Statements

Materials that present a snapshot of a business's financial health, detailing the balance sheet, income statement, and cash flow statement.

Common Voting Stock

Shares in a corporation that grant the holder the right to vote on corporate matters and potentially receive dividends.