Profitability RatiosEast Point Retail, Inc., sells professional women's apparel through company-owned retail stores. Recent financial information for East Point is provided below (all numbers in thousands). Fiscal Year 3Fiscal Year 2 Net income$148,000 $76,200 Interest expense3,000 11,400 Fiscal Year 3Fiscal Year 2Fiscal Year 1Total assets (at end of fiscal year)$3,599,419 $3,423,837 $3,065,051 Total stockholders' equity (at end of fiscal year)1,030,897 1,010,483 741,241 Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders’ equity is 15.0% for the year ended April 2, Year 3.a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round to one decimal place.Fiscal Year 3fill in the blank 1 %Fiscal Year 2fill in the blank 2 %b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round to one decimal place.Fiscal Year 3fill in the blank 3 %Fiscal Year 2fill in the blank 4 %

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Description: Profitability RatiosEast Point Retail, Inc., sells professional women's apparel through company-owned retail stores. Recent financial information for East Point is provided below (all numbers in thousands). Fiscal Year 3Fiscal Year 2 Net income$148,0

Profitability ratios are those ratios which are calculated to analyse profits or returns of the…

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 18E

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Profitability Ratios

East Point Retail, Inc., sells professional women's apparel through company-owned retail stores. Recent financial information for East Point is provided below (all numbers in thousands).

	Fiscal Year 3	Fiscal Year 2
Net income	$148,000		$76,200
Interest expense	3,000		11,400

	Fiscal Year 3	Fiscal Year 2	Fiscal Year 1
Total assets (at end of fiscal year)	$3,599,419		$3,423,837	$3,065,051
Total stockholders' equity (at end of fiscal year)	1,030,897		1,010,483	741,241

Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders’ equity is 15.0% for the year ended April 2, Year 3.

a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round to one decimal place.