Comparative Calendar Year Financial Data for a Company Are Shown

question 85

Essay

Comparative calendar year financial data for a company are shown below:
Calculate:
(1) Return on total assets for 2014.
(2) Return on common stockholders' equity for 2014.

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Definitions:

Break-even Sales

The amount of revenue needed to cover all fixed and variable costs, resulting in zero profit or loss.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business.

Contribution Margin

The difference between sales revenue and variable costs, used to cover fixed costs and to provide profit to the company.

Fixed Costs

Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance.