What is the percent return on total market value

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Singular Corp. Has the following income statement data: 2006 2007 Sales $500,000 $700,000 Gross Profit 161,300 205,000 Selling and administrative expense 45,200 74,300 Interest expense 15,200 29,100 Net income (after these and other expenses) 44,100 45,600

a. Compute the ratio of each of the last four items to sales for 2006 and 2007. b. Based on your calculations, is the company improving or declining in its performance?

In the year 2007, the average firm in the S&P 500 Index had a total market value of fives times stockholders' equity (book value). Assume a firm had total assets of $10 million, total debt of $ 6 million and net income of $600,000.

a. What is the percent return on equity?

b. What is the percent return on total market value? Does this appear to be an adequate return on the actual market value of the firm?

 

Reference no: EM13281961

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