Question

ABC Ltd 2017 income statement listed net sales of sh. 125 million, earnings before interest taxes of sh. 56 million, net income availble to common stockholders of sh. 32 million and common stock dividends of sh. 12 million. The year ended balance sheets listed total assets at sh. 525 million, common stockholder equity of sh. 210 million with 2 million shares outstanding.

required

calculate and explain the meaning of:

i) profit margin

ii) basic earnings power ratio

iii) return on asset

iv) return on equity

v) dividend payout ratio

Answer 1

please see the answers below