In 2021, Jake's Jamming Music, Inc., announced an ROA of 8.65 percent, ROE of 15.40 percent, and profit margin of 15.1 percent. The firm had total assets of $10.4 million at year-end 2021.
Calculate the 2021 value of net income available to common stockholders for Jake’s Jamming Music, Inc. (Enter your answer in dollars. Round your answer to the nearest whole dollar.)
Calculate the 2021 common stockholders’ equity for Jake’s Jamming Music, Inc. (Enter your answer in dollars not in millions and round to the nearest whole dollar.)
Calculate the 2021 net sales for Jake’s Jamming Music, Inc. (Enter your answer in dollars not in millions and round to the nearest whole dollar.)
ROA = Net income / Total assets = 8.65%
ROE = Net income / Total Equity = 15.40%
Profit margin = Net income / Sales = 15.1%
Total assets = $ 10.4 million
Part (1)
Based on the formula for ROA and ROE explained in the earlier step, we can quickly make out that,
Net income = ROA x Total assets = 8.65% x $ 10.4 million = $ 899,600
Part (2)
common stockholders’ equity = Net inco...
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