Question

Applying the Accounting Equation and Calculating Ratios
The following table contains financial statement information for The Procter & Gamble Company ($ millions).

Year	Assets	Liabilities	Equity	Net Income
2011	$138,354	$70,353	$       ?	$11,927
2012	?	68,209	64,035	10,904
2013	139,263	?	68,709	11,402

Required
a. Compute the missing amounts for assets, liabilities, and equity for each year.

2011	$---------- million
2012	$---------- million
2013	$---------- million

b. Compute return on equity for 2012 and 2013. (Round your answer to one decimal place.)

2012	--------%
2013	--------%

c. Compute the debt-to-equity ratio for 2012 and 2013. (Round your answer to one decimal place.)

2012	Answer
2013	Answer

Answer 1

(A) computation of asset, liability and equity for each year

year2011-

asst= liability+equity

138354=70353+equity

equity=68001

year2012-

asset=liability+equity

asset=68209+64035

=132244

year2013-

asset=liability+equity

139263=liabilty+68709

liability=70554

(B)RETURN ON EQUITY FOR YEAR 2012

ROE= net income/shareholder equity

=10904/64035

=17.028%

RETURN ON EQUITY FOR YEAR2013

=11402/68709

=16.59%

(C) DEBT TO EQUITY RATIO FOR YEAR2012

=debt/equity

=68209/64035

=1.065

FOR YEAR2013

=70544/68709

=1.026