Sheridan, Inc., has net income of $15,300,000 on net sales of $450,000,000. The company has total assets of $125,000,000 and stockholders' equity of $40,000,000. Use the extended DuPont identity to find the return on assets and return on equity for the firm. (Round answers to 2 decimal places, e. g. 12.25 or 12.25%.)

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Business

Dean Hall

21 June, 10:59

Sheridan, Inc., has net income of $15,300,000 on net sales of $450,000,000. The company has total assets of $125,000,000 and stockholders' equity of $40,000,000. Use the extended DuPont identity to find the return on assets and return on equity for the firm. (Round answers to 2 decimal places, e. g. 12.25 or 12.25%.)

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Answers (1)

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Chris · Answer 1

(a) 0.1224

(b) 0.3825

Explanation:

Given that,

Net income = $15,300,000

Net sales = $450,000,000

Total assets = $125,000,000

Stockholders' equity = $40,000,000

(A) Return on assets:

= Net income : Total assets

= $15,300,000 : $125,000,000

= 0.1224

(b) Return on equity:

= Net income : Stockholders' equity

= $15,300,000 : $40,000,000

= 0.3825