Question

Comparative financial statement data of Manfield, Inc.​ follow: Compute the following ratios for 2018 and 2017​:...

Comparative financial statement data of Manfield, Inc.​ follow:

Compute the following ratios for 2018 and 2017​:

a.

Current ratio

b.

Cash ratio

c.

​Times-interest-earned ratio

d.

Inventory turnover

e.

Gross profit percentage

f.

Debt to equity ratio

g.

Rate of return on common​ stockholders' equity

h.

Earnings per share of common stock

i.

​Price/earnings ratio

2.

Decide​ (a) whether Manfield​'s ability to pay debts and to sell inventory improved or deteriorated during 2018 and​ (b) whether the investment attractiveness of its common stock appears to have increased or decreased.

Additional Info:

1.

Market price of Manfield​'s common​ stock: $66.15 at December​ 31, 2018​, and $45.12 at December​ 31, 2017.

2.

Common shares​ outstanding: 13,000 on December​ 31, 2018 and 12,000 on December​ 31, 2017 and 2016.

3.

All sales are on credit.

Manfield, Inc.

Comparative Income Statement

Years Ended December 31, 2018 and 2017

2018

2017

Net Sales Revenue

$461,000

$426,000

Cost of Goods Sold

238,000

212,000

Gross Profit

223,000

214,000

Operating Expenses

134,000

132,000

Income From Operations

89,000

82,000

Interest Expense

9,000

10,000

Income Before Income Tax

80,000

72,000

Income Tax Expense

21,000

23,000

Net Income

$59,000

$49,000

Manfield, Inc.

Comparative Balance Sheet

December 31, 2018 and 2017

2018

2017

2016*

Assets

Current Assets:

Cash

$92,000

$90,000

Accounts Receivables, Net

107,000

116,000

$103,000

Merchandise Inventory

143,000

163,000

203,000

Prepaid Expenses

14,000

8,000

Total Current Assets

356,000

377,000

Property, Plant, and Equipment, Net

216,000

181,000

Total Assets

$572,000

$558,000

$596,000

Liabilities

Total Current Liabilities

$225,000

$241,000

Long-term Liabilities

119,000

98,000

Total Liabilities

344,000

339,000

Stockholders' Equity

Preferred Stock, 4%

98,000

98,000

Common Stockholders' Equity, no par

130,000

121,000

89,000

Total Liabilities and Stockholders' Equity

$572,000

$558,000

* Selected 2016 amounts

I am all the way to g but I'm so confused, no matter how I calculate it I just keep getting answers that the program says wrong. But I literally follows what the books says to calculate it...... Question G is making me frustrated.

g. Compute the rate of return on common​ stockholders' equity of 2018 and 2017. (Round your answers to one tenth of a​ percent, X.X%.)

Rate of return on common stockholders' equity = (Net income - Preferred dividends) / Average common stockholder's equity

Homework Answers

Answer #1

The rate of return on common stockholder's equity can be calculated with the use of following formula:

Rate of Return on Common Stockholders' Equity = (Net Income - Preferred Dividends) / Average Common Stockholder's Equity*100

_____

2018:

Here Net Income = $59,000, Preferred Dividend = 98,000*4% = $3,920 and Average Common Stockholder's Equity = (130,000 + 121,000)/2 = $125,500

Using these values in the above formula, we get,

Rate of Return on Common Stockholders' Equity (2018) = (59,000 - 3,920)/125,500*100 = 43.9%

_____

2017:

Here Net Income = $49,000, Preferred Dividend = 98,000*4% = $3,920 and Average Common Stockholder's Equity = (121,000 + 89,000)/2 = $105,000

Using these values in the above formula, we get,

Rate of Return on Common Stockholders' Equity (2017) = (49,000 - 3,920)/105,000*100 = 42.9%

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2016 and 2017 2017 2016 Gross...
LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2016 and 2017 2017 2016 Gross sales $ 19,000 $ 15,000 Sales returns and allowances 1,000 100 Net sales $ 18,000 $ 14,900 Cost of merchandise (goods) sold 12,000 9,000 Gross profit $ 6,000 $ 5,900 Operating expenses: Depreciation $ 700 $ 600 Selling and administrative 2,200 2,000 Research 550 500 Miscellaneous 360 300 Total operating expenses $ 3,810 $ 3,400 Income before interest and taxes $ 2,190 $ 2,500...
The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc....
The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $57 on December 31, 2016. Blige Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015     2016     2015 Retained earnings, January 1 $1,944,750 $1,648,550 Add net income for year 432,000 337,700 Total $2,376,750 $1,986,250 Deduct dividends On preferred stock $7,000 $7,000 On common stock 34,500 34,500 Total $41,500 $41,500 Retained earnings, December 31 $2,335,250 $1,944,750 Blige Inc....
The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc....
The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $64 on December 31, 2016. Blige Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015     2016     2015 Retained earnings, January 1 $2,464,650 $2,084,550 Add net income for year 577,600 427,000 Total $3,042,250 $2,511,550 Deduct dividends On preferred stock $7,000 $7,000 On common stock 39,900 39,900 Total $46,900 $46,900 Retained earnings, December 31 $2,995,350 $2,464,650 Blige Inc....
Nineteen Measures of Solvency and Profitability The comparative financial statements of Bettancort Inc. are as follows....
Nineteen Measures of Solvency and Profitability The comparative financial statements of Bettancort Inc. are as follows. The market price of Bettancort Inc. common stock was $71.25 on December 31, 2016. Bettancort Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015     2016     2015 Retained earnings, January 1 $2,655,000 $2,400,000 Add net income for year 300,000 280,000 Total $2,955,000 $2,680,000 Deduct dividends: On preferred stock $15,000 $15,000 On common stock 10,000 10,000 Total $25,000 $25,000 Retained earnings,...
Nineteen Measures of Solvency and Profitability The comparative financial statements of Blige Inc. are as follows....
Nineteen Measures of Solvency and Profitability The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $67 on December 31, 2016. Blige Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015     2016     2015 Retained earnings, January 1 $1,928,600 $1,628,300 Add net income for year 456,000 333,500 Total $2,384,600 $1,961,800 Deduct dividends On preferred stock $5,600 $5,600 On common stock 27,600 27,600 Total $33,200 $33,200 Retained earnings,...
Kappa ?Designs, Inc. has the following? data:?? Kappa Designs, Inc. Comparative Balance Sheet December 31, 2018...
Kappa ?Designs, Inc. has the following? data:?? Kappa Designs, Inc. Comparative Balance Sheet December 31, 2018 and 2017 2018 2017 Assets Total Current Assets $43,452 $64,460 Property, Plant, and Equipment, Net 210,444 146,500 Other Assets 30,104 82,040 Total Assets $284,000 $293,000 Liabilities Total Current Liabilities $46,860 $44,536 Long-term Debt 108,204 200,705 Total Liabilities 155,064 245,241 Stockholders' Equity Total Stockholders' Equity 128,936 47,759 Total Liabilities and Stockholders' Equity $284,000 $293,000 Perform a vertical analysis of Kappa ?Designs' balance sheet for each...
MONTGOMERY INC. Comparative Balance Sheets December 31, 2018 and 2017 2018 2017 Assets Cash $ 55,900...
MONTGOMERY INC. Comparative Balance Sheets December 31, 2018 and 2017 2018 2017 Assets Cash $ 55,900 $ 56,300 Accounts receivable, net 13,800 16,800 Inventory 123,700 97,100 Total current assets 193,400 170,200 Equipment 68,500 57,500 Accum. depreciation—Equipment (31,000 ) (21,200 ) Total assets $ 230,900 $ 206,500 Liabilities and Equity Accounts payable $ 33,000 $ 35,200 Salaries payable 600 800 Total current liabilities 33,600 36,000 Equity Common stock, no par value 165,900 153,100 Retained earnings 31,400 17,400 Total liabilities and equity...
Nineteen Measures of Solvency and Profitability The comparative financial statements of Blige Inc. are as follows....
Nineteen Measures of Solvency and Profitability The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $62 on December 31, 2016. Blige Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015     2016     2015 Retained earnings, January 1 $2,822,400 $2,389,100 Add net income for year 651,200 489,300 Total $3,473,600 $2,878,400 Deduct dividends On preferred stock $8,400 $8,400 On common stock 47,600 47,600 Total $56,000 $56,000 Retained earnings,...
Exercise 12-82 Stockholder Ratios Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in...
Exercise 12-82 Stockholder Ratios Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in thousands except per share amounts) 2019 2018 2017 Net sales $7,245,088 $6,944,296 $6,149,218 Cost of goods sold (5,286,253) (4,953,556) (4,355,675) Gross margin $1,958,835 $1,990,740 $1,793,543 General and administrative expenses (1,259,896) (1,202,042) (1,080,843) Special and nonrecurring items 2,617 0 0 Operating income $701,556 $788,698 $712,700 Interest expense (63,685) (62,398) (63,927) Other income 7,308 10,080 11,529 Gain on sale of investments 0 9,117 0 Income before...
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall Inc....
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall Inc. common stock was $ 57 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1    20Y2    20Y1 Retained earnings, January 1 $ 1,662,900 $ 1,409,300 Net income 369,200 288,600 Total $ 1,962,100 $ 1,697,900 Dividends On preferred stock $ 6,300 $ 6,300 On common stock 28,700 28,700 Total dividends $ 35,000 $ 35,000 Retained earnings,...