Question

Queen Products Company are presented below. All balance sheet data are as of December 31.

Answer 1

Answer:

1. Asset turnover times. =1.31 times

2. Return on assets. = 7.9%

3. Return on common stockholders’ equity =10.5%

Explanation:

Asset turnover

Asset turnover indicates how efficient a business in the use of asset to generate sales. The higher the number of times the better.

Asst turnover = Turnover /Total asset

                      = 757,500/577,100

                       =1.31 times

Return on Asset

Return on asset is measure of the percentage of asset earned as income. The higher the better

Return on assets = Net income/Assets

                              = 45,500/577,100× 100

                              = 7.9%

Return on Equity

This measures the proportion of equity investment earned as net income. The higher the better

Return on Equity = Net income/Equity

Return on commons stockholders

= 45,500/433,400 × 100

=10.5%