PLP Corporation began operations on January 1, 2014. The initial investment by the owners was $100,000. The

Question:

PLP Corporation began operations on January 1, 2014. The initial investment by the owners was $100,000. The following information was extracted from the company€™s records.

December 31 Shareholders' Equity December 31 Cost of Goods Sold Net Income Inventory $510,000 $100,000 $200,000 255,000

a. Compute the return on equity for each year. Has the company been effective at managing the capital provided by the equity owners?
b. Does the information about inventory and the cost of goods sold indicate any reason for the trend in return on equity? Support your answer with any relevant ratios.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: