Determine the rate earned on total assets the rate earned

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Reference no: EM13616013

The following selected data were taken from the financial statements of Preslar Inc. for December 31, 2012, 2011, and 2010:
December
                             2012                2011                         2010

Total assets:       4,500,000             4,050,000                 3,600,000
Notes Payable (8%)    1,500,000             1,500,000                 1,500,000
Common Stock        600,000                 600,000                    600,000
Preferred 4% Stock,    $100 par

No change during the year......300,000 300,000                     300,000
Retained Earnings..................1,765,500 1,341,750            900,000

The 2012 net income was $435,750, and the 2011 net income was $453,750. No dividends on common stock were declared between 2010 and 2012.

a. Determine the rate earned on total assets, the rate earned on stockholders' equity, and the rate earned on common stockholders' equity for the years 2011 and 2012. When required, round to one decimal place.
                                                               2012    2011
Rate earned on total assets:                         % %
Rate earned on stockholders' equity:               %        %
Rate earned on common stockholders' equity: %         %

b. What conclusions can be drawn from these data as to the company's profitability?

Reference no: EM13616013

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