Assume that Skippito, Inc. has the following data: Net income for 2014 ..............$ 223,000 Preferred dividends for
Question:
Assume that Skippito, Inc. has the following data:
Net income for 2014 ..............$ 223,000
Preferred dividends for 2014 ............ 23,000
Total shareholders’ equity, 12/31/2014 ......1,009,000
Total shareholders’ equity, 12/31/2013 ......1,384,000
Common shareholders’ equity, 12/31/2014 ...... 987,000
Common shareholders’ equity, 12/31/2013 ......1,207,000
Requirements
1. Calculate Skippito's return on equity for 2014.
2. Calculate Skippito's return on common equity for 2014.
3. Comment on Skippito's performance during 2014.
Step by Step Answer:
Req 1 Rate of return on shareholders equity Net income Average shareholders equity 223000 1009...View the full answer
Financial Accounting
ISBN: 978-0132889711
1st Canadian Edition
Authors: Jeffrey Waybright, Liang Hsuan Chen, Rhonda Pyper
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
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