ACC/400
Question Description
Resources:
Financial Accounting: Tools for Business Decision
Making
Prepare responses to the
following assignment from the e-text.Ch. 11: Decision
Making Across the Organization BYP11-7—page 581.
DECISION MAKING ACROSS THE
ORGANIZATION
BYP11-7 In recent years the
fast-food chain Wendy’s International has purchased manytreasury shares. From January 3, 1999, to December 30,2001, the number of shares outstanding has fallen from 124 million to 105 million. The following information was drawn from the company’s financial statements (in millions).
Year ended
Dec. 30, 2001 Jan. 3, 1999
Net income $ 193.6 $123.4
Total assets 2,076.0 1,837.9
Average total assets 2,016.9 1,889.8
Total common stockholders’ equity 1,029.8 1,068.1
Average common stockholders’ equity 1,078.0 1,126.2
Total liabilities 1,046.3 769.9
Average total liabilities 939.0 763.7
Interest expense 30.2 19.8
Income taxes 113.7 84.3
Cash provided by operations 305.2 233.8
Cash dividends paid on common stock 26.8 31.0
Preferred stock dividends 0 0
Average number of common shares outstanding 109.7 119.9
Instructions
Use the information provided to answer the following
questions.
(a) Compute earnings per share, return on common stockholders’ equity, and return on
assets for both years. Discuss the change in the company’s profitability over this period.
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