Answer:
Friendly Fashions:
Ratios Calculations in 2018:
1) Return on Equity = Net Income divided by Equity x 100
Return on Equity = $170/$1,780 x 100 = 9%
2) Return on the market value of equity = share price/average shares outstanding = $8/710 x 100 = 1.12%
3) Earnings per share = Net Income divided by average shares outstanding = $170/710 = $0.24
4) Price-earnings ratio = Market value per share/Earnings per share = $8/$0.24 = $33.3
Explanation:
1) Return on Equity: The return on equity is a measure of the financial performance of an entity, which evaluates the effectiveness of management in using assets to create profits.
2) Return on the market value of equity: This measures the profit yield on the stock market capitalization. It measures the intrinsic value of a stock by comparing the share price to the number of shares outstanding. It is also called the market capitalization.
3) Earnings per share: This is a measure of a company's profitability. It can be used as an indicator to pick stock to buy. To determine the net income used for this calculation, it is necessary to deduct the dividend of preferred stock, where it exists, before arriving at the net income.
4) Price-earnings ratio: This company valuation method measures the share price relative to the earnings. It is also called the price multiple and earnings multiple. It shows how much an investor can pay in dollars in order to earn a dollar of earnings. It also indicates if a stock is overvalued or undervalued.
Answer:
$7,200,000
Explanation:
Given that,
Common stock = $5,400,000
Retained earnings = $2,000,000
Unrealized gains on trading securities = $100,000
Unrealized losses on available for sale securities = $200,000
Stockholder's equity:
= Common stock + Retained earnings - Unrealized losses on available for sale securities
= $5,400,000 + $2,000,000 - $200,000
= $7,200,000
Note that:
Unrealized gains on trading securities should be presented on the income statement. Hence, the ending retained earnings balance was already been adjusted with Unrealized gains (losses) on trading securities.
Unrealized losses on available for sale securities not included in the income statement and it directly goes to the balance sheet.
Answer:
$5,860
Explanation:
Computation for their tax savings from the preferential rate
First step is to calculate their tax liability
Using this formula
Tax liability =[Tax amount on $169,300 ordinary income-(Tax Amount on $120,300 ordinary income +Tax amount on $49,000 preferential income)]
Let plug in the formula
Tax Savings=[$35,648-($22,438+$7,350)]
Tax Savings=$35,648-$29,788
Tax Savings=$5,860
Therefore their tax savings from the preferential rate is $5,860
A company issued 115 shares of $100 par value
<span> Common stock value
= $12,500 </span>
Total
amount of paid-in capital = ?
Multiply
the shares with amount par value =
Amount of shares = 115 x 100 = $11,500
Total amount of paid-in capital = common stock
value - total amount of shares = $12,500 - $11,500
= $1000
So, total amount paid in capital is $1000.
Answer:
Substantiality.
Explanation:
Market segmentation is one of the important marketing strategies to divide the entire market into small segments in order to implement a better technique to satisfy the consumer need with specific products and schemes. There are four basic criteria for useful segmentation of the market:
- Accessibility.
- Actionability.
- Substantiality.
- Responsiveness.
Substantiality: This criterion of segmentation express the notion that the target market must be large enough to be profitable as a small segment can not justify the investment.
Similarly in the given case, it talks about the substantiality criteria of segmentation as it says a selected segment must be large enough to warrant developing and maintaining a special marketing mix.
