BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

Solutions

Chapter
Section
BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Profitability and stockholder ratios
Harley-Davidson, Inc. (HOG),

is a leading motorcycle manufacturer in the United States. The company manufactures and sells a number of different types of motorcycles, a complete line of motorcycle parts, and brand-related accessories, clothing, and collectibles.
The following information is available for three recent years (in millions except per-share amounts):


Calculate the following ratios for each year. Round to one decimal place except dollar amounts, which should he rounded to the nearest cent.
a.Return on total assets
b.Return on stockholders' equity
c.Earnings per share
d.Dividend yield
e.Price-earninus ratio using the average price oer share of stock.

To determine

Introduction:

Accounting ratios are used to evaluate the financial performance of the business organisation

Profitability analysis:

Profitability analysis is used to evaluate the ability of a company to generate income relative to revenue, assets, operating cost and shareholders' equity during a specific period.

To calculate:

The profitability and stockholders' ratios.

Explanation
    formulayear 3year 2year 1
    Rate earned on total assetsNet income /Average total assets x 1007529,760= 7.7% 845 9,467= 8.9% 734 9,288= 7.9%
    Rate earned on stockholders' equityNet Income - preferred stock dividends /average stock holders' equity 7522374= 0.32 845 2,959= 0.29 734 2,784= 0.26
    Earnings per sharenet income / average number of shares outstanding752203= $3

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are the two definitions of cash, and why do corporate treasurers often use the second definition?

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)