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The following selected data were taken from the financial statements of the Winter Group for the 3 most recent years of operations: Total assets Notes payable (10% interest) Common stock Preferred $6 stock, $100 par Retained earnings Dec. 31. Year 3 Dec.31, Year 2 Dec. 31, Year 1 $3,000,000 $2,700,000 $2,400,000 1,000,000 1,000,000 1,000,000 400,000 400,000 400,000 200,000 200,000 200,000 1,126,000 896,000 600,000 The Year 3 net income was $262,000, and the Year 2 net income was $348,000. No dividends on common stock were declared during the 3 (a) Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for Years 2 and 3. Round to one decimal place. (b) What conclusions can be drawn from these data as to the company's profitability?

The following selected data were taken from the financial statements of the Winter Group for the 3 most recent years of operations: Total assets Notes payable (10% interest) Common stock Preferred $6 stock, $100 par Retained earnings Dec. 31. Year 3 Dec.31, Year 2 Dec. 31, Year 1 $3,000,000 $2,700,000 $2,400,000 1,000,000 1,000,000 1,000,000 400,000 400,000 400,000 200,000 200,000 200,000 1,126,000 896,000 600,000 The Year 3 net income was $262,000, and the Year 2 net income was $348,000. No dividends on common stock were declared during the 3 (a) Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for Years 2 and 3. Round to one decimal place. (b) What conclusions can be drawn from these data as to the company's profitability?

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 17E
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The following selected data were taken from the financial statements of the Winter Group for the 3 most recent years of operations: Total assets Notes payable (10% interest) Common stock Preferred $6 stock, $100 par Retained earnings Dec. 31. Year 3 Dec.31, Year 2 Dec. 31, Year 1 $3,000,000 $2,700,000 $2,400,000 1,000,000 1,000,000 1,000,000 400,000 400,000 400,000 200,000 200,000 200,000 1,126,000 896,000 600,000 The Year 3 net income was $262,000, and the Year 2 net income was $348,000. No dividends on common stock were declared during the 3 years. (a) Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for Years 2 and 3. Round to one decimal place. (b) What conclusions can be drawn from these data as to the company's profitability?
Transcribed Image Text:The following selected data were taken from the financial statements of the Winter Group for the 3 most recent years of operations: Total assets Notes payable (10% interest) Common stock Preferred $6 stock, $100 par Retained earnings Dec. 31. Year 3 Dec.31, Year 2 Dec. 31, Year 1 $3,000,000 $2,700,000 $2,400,000 1,000,000 1,000,000 1,000,000 400,000 400,000 400,000 200,000 200,000 200,000 1,126,000 896,000 600,000 The Year 3 net income was $262,000, and the Year 2 net income was $348,000. No dividends on common stock were declared during the 3 years. (a) Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for Years 2 and 3. Round to one decimal place. (b) What conclusions can be drawn from these data as to the company's profitability?
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