Return on Common Stockholders' Equity
Smith & Sons, Inc., disclosed the following information in a recent annual report:

2015 2016
Net Income $63,000 $99,000
Preferred stock dividends 5,400 5,400
Average common stockholders' equity 2,400,000 3,000,000
Dividend per common share 2.16 2.16
Earnings per share 3.80 4.10
Market price per common share, year-end 39.00 42.00

Calculate the return on common stockholders' equity for Smith & Sons for 2015 and 2016.

Round answers to one decimal place. (Ex. 0.2345 = 23.5%)
2015 Answer

%
2016 Answer%

Did the return improve from 2015 to 2016?

Explanation:

Return on common stockholders' equity for 2015:

(Net income - preferred stock)/Equity

(63,000-5,400)/2,400,000 = 57,600/2,400,000 = 2.4%

Return on common stockholders' equity for 2015:

(99,000-5,400)/3,000,000 = 93,600/3,000,000 = 3.12%

From these calculations, it is clear that return has improved.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.