Valencia Company had the following income statements for 20X1 and 20X2: Valencia Company generally paid dividends approximately
Question:
Valencia Company had the following income statements for 20X1 and 20X2:
Valencia Company generally paid dividends approximately equal to its net income. This resulted in the company’s stockholders’ equity totaling $1,480 at the end of both 20X0 and 20X1. However, at the end of 20X2 the company’s total stockholders’ equity was $2,080 primarily because of a large issuance of common stock in mid-20X2.
1. Compute Valencia Company’s gross margin percentage, the return on sales, and the return on stockholders’ equity for 20X1 and 20X2.
2. As a stockholder, would you have been pleased about the change in performance between 20X1 and 20X2? Explain why or why not.
Common StockCommon stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Step by Step Answer:
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta