The following financial information is for A. Galler Company for 2009, 2008, and 2007: Required a. For
Question:
Required
a. For 2009, 2008, and 2007, determine the following:
1. Return on assets (using end-of-year total assets)
2. Return on investment (using end-of-year long-term liabilities and equity)
3. Return on total equity (using ending total equity)
4. Return on common equity (using ending common equity)
b. Discuss the trend in these profit figures.
c. Discuss the benefit from the use of long-term debt and preferredstock.
2009 2008 2007 Income before interest Interest expense Income before tax Tax Net income $4,400,000 800,000 3,600,000 1,500,000 $2,100,000 $4,000,000 600,000 3,400,000 1,450,000 $1,950,000 $3,300,000 550,000 2,750,000 1,050,000 $1.700,000 2008 2007 Current liabilities Long-term debt Preferred stock (14%) Common equity 2,600,000 7,000,000 100,000 $10,000,000 $2,300,000 6,200,000 $2,200,000 5,800,000 100,000 100,000 9,000,000 8,300,000
Step by Step Answer:
a 1 Return on Assets Net Income Before Minority Share of Earnings and Nonrecurring Items Average Total Assets 2009 2008 2007 A 2100000 1950000 1700000 ...View the full answer
Financial Reporting and Analysis Using Financial Accounting Information
ISBN: 978-1439080603
12th Edition
Authors: Charles H Gibson
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