Net Devices Inc $$\text { ASEETE (\$in thausands) }$$

question 25

Multiple Choice

Net Devices Inc.
The following balance sheets and income statements are for Net Devices Inc., a manufacturer of small electronic devices, including calculators, personal digital assistants and mp3 players.For purposes of these questions assume that the company has an effective tax rate of 35%.
BALANCE SHEETS
$$\text { ASEETE (\$in thausands) }$$
$\begin{array}{l}\begin{array}{lll}\text {Fiscal year end}\\\text {Cash}\\\text {Marketable securities}\\\text {Receivables}\\\text {Inventories}\\\text {Other current assets}\\\text {Total current assets}\\\\\text {Property, plant \& equipment}\\\\\text {Intangibles}\\\text {Deposits \& other assets}\\\text {Total assets}\\\end{array}\begin{array}{lll}2011 & 2010 &2009\\\$ 875,650 & \$ 571,250 &154,230\\6,560 & 0 &0\\771,580 & 775,250&902,000 \\1,320,150 & 1,254,600 &1,418,500 \\\underline{249,000} &\underline{ 231,200}&\underline{229,900 }\\3,222,940 & 2,832,300 &2,704,630\\\\1,118,750 & 1,100,300 & 1,122,400\\\\263,050 & 241,000&215,600 \\\underline{184,500} &\underline{ 168,250}&\underline{168,900}\\\underline{\$ 4789240}&\underline{\$ 4341850}& \underline{\$ 4211530}\end{array}\end{array}$

$\begin{array}{l}\begin{array}{lll}\text { LIABILITIES (\$ in thousands) }\\\\\text {Fiscal year end}\\\text {Accounts payable}\\\text {Current long term debt}\\\text {Accrued expenses}\\\text {Income taxes payable}\\\text {Other current liabilities}\\\text {Total current liabilities}\\\\\text {Long term debt}\\\text {Other long term liabilities}\\\text {Total liabilities}\\\\\text {Preferred stock}\\\text {Common stock net}\\\text {Additional Paid-in Capital}\\\text {Retained earnings}\\\text {Treasury stock}\\\text {Shareholders' equity}\\\\\text {Total Liab, \& Equity}\\\end{array}\begin{array}{lll}\\ \\2011 & 2010 &2009\\\$ 1,178,540 & \$ 1,061,100 & \$ 1,138,250 \\18,100 & 316,500 & 150,900 \\664,100 & 615,900 & 585,400 \\138,900 & 108,400 & 38,200 \\\underline{0 }& \underline{0 }&\underline{ 0} \\1,999,640 & 2,101,900 & 1,912,750 \\\\478,250 & 378,400 & 599,630 \\\underline{13,350} & \underline{0 }&\underline{0}\\2,491,240 & 2,480,300 & 2,512,380\\\\850,000 & 850,000 & 550,000 \\4,000 & 3,950 & 3,800 \\869,000 & 758,000 & 689,500 \\1,430,500 & 1,055,000 & 1,245,050 \\\underline{(855,500) }& \underline{(805,400) } & \underline{(789,200) }\\\underline{2,298,000} & \underline{1,861,550 }& \underline{1,699,150}\\\\\underline{\underline{\$ 4,789,240} }&\underline{\underline{\$ 4,341,850 }}& \$ \underline{\underline{4,211,530}}\\\end{array}\end{array}$
$\begin{array}{lcc}\text { INCOME STATEMENTS (f in thousands) }\\\\\text { Fiscal year end } & \mathbf{2 0 1 1} & \mathbf{2 0 1 0} \\\text { Net sales } & \$ 11,455,500 & \$ 11,082,100 \\\text { Cost of Goods Sold } & \underline{(8,026,450) }& \underline{(7,940,065) }\\\text { Gross profit }&3,429,050&3,142,035\\\\\text {Selling, general \& admin. Exp. }&\underline{(1,836,400) }&\underline{(1,789,200) }\\\text {Income before deprec. \& amort.}&1,592,650&1,352,835 \\\\\text {Depreciation \& amortization }&(785,250) & (757,250) \\\text {Interest expense}&\underline{(46,195) } & \underline{(43,340) }\\\\\text { Income before tax } &761,205&552,245\\\text { Provision for income taxes } &(157,725) &(112,290) \\\text { Minority interest }&--&--\\\\\text { Net income }&\underline{\underline{\$ 603.480}}&\underline{\underline{\$ 439.955}} \\\\\text { Outstanding shares (in thousands) } & 308,515 & 303,095 \\\text { Preferred Dividends (in thousands) } & \$ 85,000 & \$ 85,000\end{array}$
-Refer to the information for Net Devices Inc.What is the rate of return on assets for Net Devices for 2011?

---

Definitions:

Operating Divisions

Distinct segments within a company, each responsible for certain operational aspects or market services.

Adjustment

A change made to the book value of an asset or liability to accurately reflect its value.

Subsidiary

A company that is completely or partly owned and partly or wholly controlled by another company.

FIFO Inventory Reporting

An approach to reporting inventory where the oldest stock is recorded as sold first; reiterates the First-In, First-Out method in financial statements.