ving items in its financial statements for 2016, the current year (amouls cial s
ID: 1174762 • Letter: V
Question
ving items in its financial statements for 2016, the current year (amouls cial statement items.) mmon equity during 2016 (the current year) Lowell has n pute Lowell's return on assets and return on co eturn look strong or weak? Give your reason. do you need to make the decision in requirement 2? 1 Data Table S 17,075 Dividends paid S 205 Payment of long-term debt Proceeds from issuance Net sales 35,000 Current year Preceding year of common stock 8,475 Total liabilities 37,000 Current year-end Preceding year-end 2,309Net income: 38,033 Current year 2,200 Total stockholders' equity 1,993 Current year-end Preceding year-end 23,471 Operating income: 14,047 6,582 ar Current year Preceding year 9,125 4,004 Borrowings PrintDone ist or enter any number in the input fields and then continue to the next question.Explanation / Answer
The du pont Analysis formula for ROA and ROE -
ROA = Net Profit Margin * Total Asset turnover
ROE = Net profit Margin * Total Asset Turnover * Leverage Multiplier
Requirement 2 - Both the ratios are low and the return on equity is higher than the return on assets
Requirement 3 - Industry competitors data
Current Year Preceding Year Net Sales 35000 37000 Operating Income 9125 4004 Net Income 2200 1993 Total liabilities 32309 38033 Total Stock holders equity 23471 14047 Debt Ratio 0.58 0.73Related Questions
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