Compute the return on common stockholders equity ratios

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Reference no: EM131565086

Problem -

Comparative statement data for Farris Company and Ratzlaff Company, two competitors, appear below. All balance sheet data are as of December 31, 2017, and December 31, 2016.

 

Farris Company

Ratzlaff Company

 

2017

2016

2017

2016

Net sales

$1,520,000

 

$339,000

 

Cost of goods sold

1,030,000

 

240,600

 

Operating expenses

301,100

 

80,000

 

Interest expense

8,200

 

2,300

 

Income tax expense

53,500

 

7,000

 

Current assets

322,000

$310,600

82,600

$79,200

Plant assets (net)

519,900

498,200

140,100

124,500

Current liabilities

65,000

75,000

35,800

31,400

Long-term liabilities

108,000

90,200

28,600

25,200

Common stock, $10 par

497,000

497,000

117,000

117,000

Retained earnings

171,900

146,600

41,300

30,100

Compute the return on assets and the return on common stockholders' equity ratios for both companies.

Reference no: EM131565086

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