Profitability Ratios East Point Retail, Inc., sells apparel through company-owned retail stores. Financial information for East...

Transcribed Image Text:

Profitability Ratios East Point Retail, Inc., sells apparel through company-owned retail stores. Financial information for East Point follows (in thousands): Net income Fiscal Year 3 Fiscal Year 2 $74,600 $144,900 Interest expense 3,000 11,200 Total assets (at end of fiscal year) Fiscal Year 3 Fiscal Year 2 Fiscal Year 1 Total stockholders' equity (at end of fiscal year) $1,994,704 1,037,937 $1,897,402 1,017,383 $1,677,598 737,911 Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders' equity is 15.0% for the year ended April 2, Year 3. a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. Fiscal Year 3 Fiscal Year 2 7.4 X % % b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. Fiscal Year 3 Fiscal Year 2 % % Profitability Ratios East Point Retail, Inc., sells apparel through company-owned retail stores. Financial information for East Point follows (in thousands): Net income Fiscal Year 3 Fiscal Year 2 $74,600 $144,900 Interest expense 3,000 11,200 Total assets (at end of fiscal year) Fiscal Year 3 Fiscal Year 2 Fiscal Year 1 Total stockholders' equity (at end of fiscal year) $1,994,704 1,037,937 $1,897,402 1,017,383 $1,677,598 737,911 Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders' equity is 15.0% for the year ended April 2, Year 3. a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. Fiscal Year 3 Fiscal Year 2 7.4 X % % b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round your answers to one decimal place. Fiscal Year 3 Fiscal Year 2 % %