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16 August, 03:40

Sheridan, Inc., has net income of $15,300,000 on net sales of $450,000,000. The company has total assets of $125,000,000 and stockholders' equity of $40,000,000. Use the extended DuPont identity to find the return on assets and return on equity for the firm. (Round answers to 2 decimal places, e. g. 12.25 or 12.25%.)

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  1. 16 August, 03:47
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    (a) 0.1224

    (b) 0.3825

    Explanation:

    Given that,

    Net income = $15,300,000

    Net sales = $450,000,000

    Total assets = $125,000,000

    Stockholders' equity = $40,000,000

    (A) Return on assets:

    = Net income : Total assets

    = $15,300,000 : $125,000,000

    = 0.1224

    (b) Return on equity:

    = Net income : Stockholders' equity

    = $15,300,000 : $40,000,000

    = 0.3825
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