Q30PGB Net sales revenue, net income, a... [FREE SOLUTION]

Chapter 15: Q30PGB (page 848)

Net sales revenue, net income, and commonA stockholders鈥� equity for Azbel Mission Corporation, a manufacturer of contact lenses, follow for a four-year period.
Requirements
1.Compute trend analyses for each item for 2017鈥�2019. Use 2016 as the base year,and round to the nearest whole percent.
2.Compute the rate of return on common stockholders鈥� equity for 2017鈥�2019, rounding to three decimal places.

Expert verified

(1) Trend analysis is shown in Step 1.

(2) The return on common Stockholder鈥檚 equity for the year 2017,2018 and 2019 are 12.460%, 11.940% and 16.714% respectively

Compute the trend analysis for 2017-19 asfollows:

	2017	2018	2019
Net Income	39,000	40,000	59,000
Beginning Common Stockholder鈥檚 equity	302,000	324,000	346,000
Ending Common Stockholder鈥檚 equity	324,000	346,000	360,000
Average Common Stockholder鈥檚 equity	313,000	335,000	353,000
Return on Common Stockholder鈥檚 equity	$39,000/313,000 =12.460%	$40,000/335,000 =11.940%	$59,000/353,000 =16.714%

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1..Includes the income statement, balance sheet, statement of stockholders鈥� equity, and statement of cash flows	a. Notes to financial statements
2. Attests to the fairness of the presentation of the financial statements.	b. Report of independent registered public accounting firm
3. Includes a summary of significant accounting policies and explanations of specific items on the financial statements.	c. Management鈥檚 discussion and analysis of financial condition and results of operations (MD&A)
4. Is written by the company to help investors understand the results of operations and the financial condition of the company.	d. Financial statements