The Following Selected Data Were Taken from the Financial Statements

question 72

Essay

The following selected data were taken from the financial statements of the Berrol Group for December 31, 2012, 2011, and 2010:
The 2012 net income was $242,000 and the 2011 net income was $308,000. No dividends on common stock were declared between 2010 and 2012.
Required:
(1) Determine the rate earned on total assets, the rate earned on stockholders' equity, and the rate earned on common stockholders' equity for the years 2012 and 2011. Round to one decimal place.
(2) What conclusion can be drawn from these data as to the company's profitability?

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Definitions:

Homeostatic Mechanism

Homeostatic mechanism refers to the physiological processes that organisms use to regulate internal conditions, such as temperature and pH, to maintain a stable internal environment.

Short-Term Regulation

The management or control of processes or systems over a brief period.

Homeostatic Mechanisms

Biological processes that maintain a stable internal environment in the body despite changes in external conditions.

Stimulus Qualities

The characteristics or properties of a stimulus that contribute to its ability to elicit a response.