The following return on investment ratios were computed for Steven Company:
$$\begin{array} { l l l l l l }
& \underline{2010} & \underline{2009}& \underline{2008} &2007\
\text { Return on assets } & { 12 \% } & { 15 \% } & { 15 \% } & { 18 \% } \
\text { Return on equity } & 12 \% & 15 \% & 11 \% & 20 \%
\end{array}$$ Requirements:
A.Compute financial leverage percentage for each year.
B.Explain briefly the stockholders' advantage or disadvantage for each year.

Question

The following return on investment ratios were computed for Steven Company:
 $$\begin{array} { l l l l l l } 
& \underline{2010} & \underline{2009}& \underline{2008} &2007\
\text { Return on assets } & { 12 \% } &  { 15 \% } &  { 15 \% } & { 18 \% } \
\text { Return on equity } & 12 \% & 15 \% & 11 \% & 20 \%
\end{array}$$ Requirements:
A.Compute financial leverage percentage for each year.
B.Explain briefly the stockholders' advantage or disadvantage for each year.

Quizplus · Accepted Answer

The Answer of The following return on investment ratios were computed for Steven Company:
 $$\begin{array} { l l l l l l } 
& \underline{2010} & \underline{2009}& \underline{2008} &2007\
\text { Return on assets } & { 12 \% } &  { 15 \% } &  { 15 \% } & { 18 \% } \
\text { Return on equity } & 12 \% & 15 \% & 11 \% & 20 \%
\end{array}$$ Requirements:
A.Compute financial leverage percentage for each year.
B.Explain briefly the stockholders' advantage or disadvantage for each year.

The Following Return on Investment Ratios Were Computed for Steven