Cream of Tomato Company has the following data available.Net income = $250,000Sales = $2.5 millionTotal asset turnover = 3Equity multiplier = 2.5Cream of Tomato does not have any preferred stock outstanding. Note that the equitymultiplier is defined as total assets to equity. Calculate the return on assets and return onequity for Cream of Tomato.
Cream of Tomato Company has the following data available.Net income = $250,000Sales = $2.5 millionTotal asset turnover = 3Equity multiplier = 2.5Cream of Tomato does not have any preferred stock outstanding. Note that the equitymultiplier is defined as total assets to equity. Calculate the return on assets and return onequity for Cream of Tomato.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter13: Financial Statement Analysis
Section: Chapter Questions
Problem 13.14E
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Question
Cream of Tomato Company has the following data available.
Net income = $250,000
Sales = $2.5 million
Total asset turnover = 3
Equity multiplier = 2.5
Cream of Tomato does not have any
multiplier is defined as total assets to equity. Calculate the
equity for Cream of Tomato.
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