UCB+UGBA102A+Topic01+Slides+Appendix

UCB+UGBA102A+Topic01+Slides+Appendix - 4 Review Problem 1...

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Introduction & Basic Financial Statements UGBA102A Introduction to Financial Accounting Appendix
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UGBA102A Dennis Geyer 2 Measures of Profitability Profit Margin = Net Income / Net Sales Return on Assets = Net Income / Average Total assets Return on Equity = Net Income / Average Stockholders’ Equity How well did Dell perform in 2004?
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UGBA102A Dennis Geyer 3 Measures of Profitability Profit Margin = Net Income / Net Sales = $3,043 / $49,205 = 6.2% Return on Assets = Net Income / Average Total assets = $3,043 / ($23,215 + $19,311)/2 = 14.3% Return on Equity = Net Income / Average Stockholders’ Equity = $3,043 / ($6,485 + $6,280)/2 = 47.7%
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UGBA102A Dennis Geyer
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Unformatted text preview: 4 Review Problem 1 Callahan Properties had net income of $52,500 for the year ended December 31, 2007. The beginning balance of Retained Earnings on January 1, 2007 was $46,705. No dividends were paid during the year. Total assets on December 31, 2007 were $257,500 and the balance in the Common Stock account on December 31, 2007 was $100,000. Determine total liabilities on December 31, 2007. UGBA102A Dennis Geyer 5 Review Problem 1 Assets = Liabilities + Stockholders Equity $257,500 = X + ($52,500 + $46,705 + $100,000) $257,500 = X + $199,205 X = $58,295 Solution: Liabilities = $58,295...
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UCB+UGBA102A+Topic01+Slides+Appendix - 4 Review Problem 1...

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