In 2020, ABC Company announced an ROA of 8

Accounting Nov 12, 2020

In 2020, ABC Company announced an ROA of 8.56%, ROE of 14.5%, and profit margin of 20.5%. The firm had total assets of $16.5 million at year-end 2020. marks) (2 Required: 1. Calculate the 2020 values of net income available to common stockholders. 2. Calculate the 2020 values of common stockholders' equity, 3. Calculate the 2020 values of net sales.

Expert Solution

Value of assets 16.5 million

ROA 8.56%

Net Income available to stakeholders 16.5 million * 8.56% = 1.4124 million

ROE 14.5%

Value of Equity 1.4124 million/14.5% = 9.74 million

profit margin 20.5%

Sales Value 1.4124 million/20.5% = 6.89 million

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