Calculate the return on common shareholders equity for 2014 and evaluate the result against the industry average

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Calculate the return on common shareholders’ equity for 2014 and evaluate the result against the industry average in Exhibit, explaining why it compares favorably or unfavourably (round to two decimal places).
Current ratio........................................................... 1.6:1
Acid-test ratio .......................................................... 1.1:1
Accounts receivable turnover .................................. 16 times
Days’ sales uncollected............................................ 21 days
Merchandise turnover ............................................. 5 times
Days’ sales in inventory ........................................... 70 days
Total asset turnover ................................................. 2.3 times
Accounts payable turnover...................................... 4 times
Debt ratio ............................................................... 35%
Equity ratio ............................................................. 65%
Pledged assets to secured liabilities.......................... 1.4:1
Times interest earned .............................................. 50 times
Profit margin........................................................... 14%
Gross profit ratio..................................................... 18%
Return on total assets .............................................. 20%
Return on common shareholders’ equity................. 32.7%
Book value per common share................................ $8.63
Book value per preferred share................................ $15.00
Earnings per share ................................................... $1.79
Price–earnings per share .......................................... 18.2
Dividend yield ......................................................... $0.35

Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
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Fundamental Accounting Principles Volume II

ISBN: 978-1259066511

14th Canadian Edition

Authors: Larson Kermit, Jensen Tilly

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