Comparative Calendar Year Financial Data for a Company Are Shown

question 12

Essay

Comparative calendar year financial data for a company are shown below. Calculate the following ratios for 2018:
(a) return on total assets
(b) return on common stockholders' equity.

$$\begin{array} { l | l | l } \hline & { 2018 } & { 2017 } \\\text { Sales } & \$ 720,000 & \$ 607,500 \\\hline \text { Gross profit } & 270,000 & 224,800 \\\hline \text { Income before taxes } & 79,200 & 78,700 \\\hline \text { Net income } & 51,200 & 51,700\\\hline & & \\\hline & { 2018 } & { 2017 } \\ \hline \text { Liabilities } & \$ 493,500 & \$ 452,500 \\\hline \text { Common stock (\$12 par) } & 180,000 & 180,000 \\\hline \text { Contributed capital in excess of par } & 135,000 & 135,000 \\\hline \text { Retained earnings } & \underline{204,000} & 177,300 \\\hline \text { Total liabilities and equity } & \$ 1,012,500 & \$ 944,800\\\hline\end{array}$$

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Definitions:

Subordinates

Individuals who work under the direction and control of a supervisor or manager within an organizational hierarchy.

Promotion

The act of advancing an employee's rank or position within an organization, often accompanied by increased salary and responsibilities.

Control

The power to influence or direct people's behavior or the course of events.

Nonverbal Communication

A form of communication that does not involve words but is expressed through gestures, body language, facial expressions, and other physical behaviors.