Profitability Metrics The following selected data were taken from the financial statements of The…
Profitability Metrics The following selected data were taken from the financial statements of The O'Malley Group Inc. for December 31, 20Y5, 2014, and 20Y3: December 31 2015 2014 20Y3 Total assets $2,900,000 $2,400,000 $2,000,000 Notes payable (5% interest) 800,000 800,000 800,000 Common stock 250,000 250,000 Preferred $4 stock, $50 par (no change during year) 400,000 400,000 250,000 400,000 950,000 430,000 Retained earnings 1,450,000 550,000 Net income 530,000 330,000 No dividends on common stock were declared between 20Y3 and 20Y5. a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for the years 20Y4 and 20Y5. Round to one decimal place. 2015 2014 Rate earned on total assets Rate earned on stockholders' equity Rate earned on common stockholders' equity b. What conclusions can be drawn from these data as to the company's profitability?
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