Linda’s Clothing is a retailer of contemporary women’s clothing. Selected financial information for Linda appears below:

	2011	2010	2009	2008
Net Income	$ 56,759	$ 31,150	$ 15,375	$14,750
Total Assets at year-end	$381,500	$246,250	$145,490	$71,268
Weighted Average number of shares
Outstanding	84,215	80,546	77,965	75,888
Total Liabilities at year-end	205,967	119,657	60,522	17,623
Common Stockholders' Equity at year-end	$175,533	$126,593	$ 84,968	$53,645
Interest Expense	165	195	258	368

Required:

a.	Compute the rate of return on assets for the years 2009-2011. Linda’s has an effective tax rate of 35%.
b.	Compute the rate of return on common shareholders’ equity for the years 2009-2011.
c.	Compute basic earnings per share for the years 2009-2011.
d.	Interpret the changes in ROA versus ROCE and EPS over the three-year period.

Answer rating: 100% (QA)

Step 12 a To compute the rate of return on assets ROA for years 31 we need to divide net income by t... View the full answer