Question

Jake's jamming music, incorporated, announced an roa of 8.49 percent, roe of 13.80 percent, and profit margin of 10.3 percent. the firm had total assets of $8.8 million at year-end 2024. calculate the value of net income available to common stockholders, common stockholders’ equity, and net sales for jake’s jamming music, incorporated.

Answer 1

Net income available to common stockholders for Jake's Jamming Music, Incorporated, is $747,120, common stockholders' equity is $5,414,782.61, and net sales are $7,253,883.50. These are calculated using the firm's announced ROA, ROE, profit margin, and total assets.

Step-by-step explanation:

To determine the net income available to common stockholders, common stockholders’ equity, and net sales for Jake's Jamming Music, Incorporated, we will use the provided Return on Assets (ROA), Return on Equity (ROE), profit margin, and total assets.

• Net Income: This is calculated by multiplying the ROA by the total assets. So, Net Income = 0.0849 * $8,800,000 = $747,120.
• Common Stockholders’ Equity: This can be found by dividing the Net Income by the ROE. Thus, Common Stockholders’ Equity = Net Income / ROE = $747,120 / 0.138 = $5,414,782.61.
• Net Sales: They are determined by dividing the Net Income by the profit margin. Hence, Net Sales = Net Income / Profit Margin = $747,120 / 0.103 = $7,253,883.50.