Academy Driving School reported the following amounts in its financial statements: Calculate EPS and ROE for Year
Question:
Calculate EPS and ROE for Year 2. Another driving school in the same city reported a higher net income ($ 45,000), yet its EPS and ROE ratios were lower than those for the Academy Driving School. Explain how this apparent inconsistency could occur.
Y 1 Year 2 ear Number of common shares Net income Cash dividends paid on common stock Total stockholders equity 11,500 11,500 23.000 3,000 $240,000 S 18,000 3,000 $220,000
Step by Step Answer:
A competing company could have higher net income but lower EPS ...View the full answer
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
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