Question

Calculate the return on common shareholders’ equity for 2014 and evaluate the result against the industry average in Exhibit, explaining why it compares favorably or unfavourably (round to two decimal places).
Current ratio........................................................... 1.6:1
Acid-test ratio .......................................................... 1.1:1
Accounts receivable turnover .................................. 16 times
Days’ sales uncollected............................................ 21 days
Merchandise turnover ............................................. 5 times
Days’ sales in inventory ........................................... 70 days
Total asset turnover ................................................. 2.3 times
Accounts payable turnover...................................... 4 times
Debt ratio ............................................................... 35%
Equity ratio ............................................................. 65%
Pledged assets to secured liabilities.......................... 1.4:1
Times interest earned .............................................. 50 times
Profit margin........................................................... 14%
Gross profit ratio..................................................... 18%
Return on total assets .............................................. 20%
Return on common shareholders’ equity................. 32.7%
Book value per common share................................ $8.63
Book value per preferred share................................ $15.00
Earnings per share ................................................... $1.79
Price–earnings per share .......................................... 18.2
Dividend yield ......................................................... $0.35



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  • CreatedJanuary 08, 2015
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