Equity Multiplier and Return on Equity Bettles Fried Chicken Company h

QUESTION

Equity Multiplier and Return on Equity Bettles Fried Chicken Company has a debt-equity ratio of 0.80. Return on assets is 9.2 percent, and total equity is $520,000. What is the equity multiplier? Return on equity net income? Just Dew It Corporation reports the following balance sheet information for 2006 and 2007. Use this information to work Problems 13 through17.
Equity Multiplier = Total Assets/Total Stockholders equity Year 2006 2007 Total Assets $ 440,133 $ 476,327 Stockholders equity $ 255,592 $ 293,850 Equity Multiplier 1.72 1.62 Return on Assets = Net Income/Total Assets Net Income = Return on Assets * Total Assets Year 2006 2007 Total Assets $ 440,133 $ 476,327 Return¦

on Assets 9.20% 9.20% Net Income $ 40,492 $ 43,822 Retun on Equity = Net Income/owners equity Year 2006 2007 Net Income $ 40,492 $ 43,822 Stockholders equity $ 255,592 $ 293,850 Retun on Equity 15.84% 14.91%

ANSWER:

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