Financial Statements for Larned Company Appear Below: Dividends

question 126

Multiple Choice

Financial statements for Larned Company appear below: Dividends during Year 2 totaled $263 thousand, of which $12 thousand were preferred dividends.
The market price of a share of common stock on December 31, Year 2 was $160.

-Larned Company's return on total assets for Year 2 was closest to:

• A)15.8%
• B)17.2%
• C)18.6%
• D)17.8%

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Definitions:

Total Asset Turnover

A financial ratio that measures a company’s ability to generate sales from its assets by comparing net sales with average total assets.

Inventory Turnover

A ratio showing how many times a company has sold and replaced inventory over a certain period of time, indicating the efficiency of inventory management.

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating the leverage and financial risk of the company.

Days' Sales in Inventory

A financial metric that shows the average number of days a company takes to turn its inventory into sales.