Match each computation to one of the profitability measures in the table. $0.70
ID: 2594279 • Letter: M
Question
Match each computation to one of the profitability measures in the table.
$0.70 ÷ $35
$35 ÷ $3.05
$175,000 ÷ 250,000 shares
$786,300 ÷ [($4,079,000 + $3,875,050) ÷ 2]
($786,300 + $127,000) ÷ [($6,609,000 + $6,419,000) ÷ 2]
($786,300 – $65,000) ÷ 250,000 shares
($786,300 – $65,000) ÷ [($3,591,500 + $3,447,840) ÷ 2]
$8,250,000 ÷ [($6,609,000 + $6,419,000) ÷ 2]
Profitability Measures Computations Asset turnover $8,250,000 ÷ [($6,609,000 + $6,419,000) ÷ 2] Return on total assets Return on stockholders’ equity Return on common stockholders’ equity Earnings per share on common stock Price-earnings ratio Dividends per share Dividend yieldExplanation / Answer
Answer:
Profitability Measures
Formula
Computations
Asset turnover
Asset Turnover = Sales / Average Total Assets
$8,250,000 ÷ [($6,609,000 + $6,419,000) ÷ 2]
Return on total assets
,= Net income+ interest exp/
Average total assets
($786,300 + $127,000) ÷ [($6,609,000 + $6,419,000) ÷ 2]
Return on stockholders’ equity
,= Net income /
Average stock holder equity
$786,300 ÷ [($4,079,000 + $3,875,050) ÷ 2]
Return on common stockholders’ equity
,= Net income -pref dividend/
Average common equity
($786,300 – $65,000) ÷ [($3,591,500 + $3,447,840) ÷ 2]
Earnings per share on common stock
,= Net income /
weighted avg no of common share
($786,300 – $65,000) ÷ 250,000 shares
Price-earnings ratio
,= Marketed value / EPS
$35 ÷ $3.05
Dividends per share
,= total dividend / total No of share
175,000 ÷ 250,000 shares
Dividend yield
,= most recent dividend/ marketed
price
$0.70 ÷ $35
a
Profitability Measures
Formula
Computations
Asset turnover
Asset Turnover = Sales / Average Total Assets
$8,250,000 ÷ [($6,609,000 + $6,419,000) ÷ 2]
Return on total assets
,= Net income+ interest exp/
Average total assets
($786,300 + $127,000) ÷ [($6,609,000 + $6,419,000) ÷ 2]
Return on stockholders’ equity
,= Net income /
Average stock holder equity
$786,300 ÷ [($4,079,000 + $3,875,050) ÷ 2]
Return on common stockholders’ equity
,= Net income -pref dividend/
Average common equity
($786,300 – $65,000) ÷ [($3,591,500 + $3,447,840) ÷ 2]
Earnings per share on common stock
,= Net income /
weighted avg no of common share
($786,300 – $65,000) ÷ 250,000 shares
Price-earnings ratio
,= Marketed value / EPS
$35 ÷ $3.05
Dividends per share
,= total dividend / total No of share
175,000 ÷ 250,000 shares
Dividend yield
,= most recent dividend/ marketed
price
$0.70 ÷ $35