Calculating return on equity (Learning Objective) 10-15 min.
Assume that Skippito, Inc., has the following data:
| Net income for 2010 |
$223,000 |
| Preferred dividends for 2010 |
$23,000 |
| Total stockholders' equity, 12/31/2010 |
$1,009,000 |
| Total stockholders' equity, 12/31/2009 |
$1,384,000 |
| Common stockholders' equity, 12/31/2010 |
$9,137,000 |
| Common stockholders' equity, 12/31/2009 |
$1,207,000 |
Requirements
1. Calculate Skippito's return on equity for 2010.
2. Calculate Skippito's return on common equity for 2010.
3. Comment on Skippito's performance during 2010.