Question

The following selected data were taken from the financial statements of Atlantic Resources, Inc., for December 31, 2008, 2007, and 2006:


The 2008 net income was $1,000,000, and the 2007 net income was $630,000.
a. Determine the rate earned on total assets and the rate earned on stockholders’ equity for the years 2007 and 2008. Round to one decimal place.
b. Relate the rate earned on stockholders’ equity to the rate earned on total assets using the leverage ratio for fiscal year 2008. Round to a single decimal place.
c. What conclusions can be drawn from these data as to the company’sprofitability?


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  • CreatedMay 29, 2012
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