Business & Finance
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Financial Accounting: Tools for Business Decision

Prepare responses to the
following assignment from the e-text.Ch. 11: Decision
Making Across the Organization BYP11-7—page 581.


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


Use the information provided to answer the following

(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

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