The following are selected financial data in thousands of dollars for the Hunter
ID: 2697760 • Letter: T
Question
The following are selected financial data in thousands of dollars for the Hunter Corporation.
Current Assets
$ 500 2006
$ 400 2005
Fixed Assets, net
$ 700 2006
$ 600 2005
Total Assets
$ 1,200 2006
$ 1,000 2005
Current Liabilities
$ 300 2006
$ 200 2005
Longâ€Term Debt
$ 200 2006
$ 200 2005
Common Equity
$ 700 2006
$ 600 2005
Total Liabilities and Equity
$ 1,200 2006
$ 1,000 2005
Net Sales
$ 1,500 2006
$ 1,200 2005
Total Expenses
$ (1,390) 2006
$ (1,100) 2005
Net Income
$ 110 2006
$ 100 2005
a. Calculate Hunter’s rate of return on total assets in 2006 and in 2005. Did the ratio improve or worsen?
b.Diagram the expanded DuPont system for Hunter for 2006. Insert the appropriate dollar amounts wherever possible.
c.Use the Du Pont system to calculate the return on assets for the two years, and determine why they changed.
Explanation / Answer
in 2006
rate of return on totalassests = EBIT/totalnet assests
= net income + interest expense + taxes / total ne assests
= 100 + 1100 / 1000= 1.2
in 2006
rate of return on total assest = 110+1390/1200 = 1.25
it improved
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.