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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?
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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