PROBLEMS

P1-36. (40 minutes) LO 2, 5 b. 2019 ROE = $3,966 / [($52,883 + $47,579)/2] = 7.90% 2020 ROE = $13,103 / [($47,579 + $46,878)/2] = 27.74%

P&G’s ROE increased in 2020, and it was above the median for Fortune 500 companies in 2020, but not in 2019 c. 2019 debt-to-equity = $67,516 / $47,579 = 1.42

2020 debt-to-equity = $73,822 / $46,878 = 1.57

P&G’s debt-to-equity ratio increased in 2020 and it is below the median for Fortune 500 companies in both years.

©Cambridge Business Publishers, 2023

*Note: amount includes cash, cash equivalents and restricted cash.

P1-39. (30 minutes)

P1-40. (30 minutes)

* Note: amount includes cash, cash equivalents and restricted cash.

Financial Accounting, 7e by Pfeiffer , Hanlon, Magee 2023 , Solution Manual Chapter 1

P1-41.

Crocker

P1-43. (15 minutes)

LO 2, 3, 5 a. Return on equity is net income divided by average stockholders’ equity. b. Debt-to-equity is total liabilities divided by stockholders’ equity. Nokia’s debt-to-equity: (€39,128 €15,401) / €15,401 = 1.54. c. Revenues less expenses equal net income. Taking the revenues and net income numbers for Nokia, yields: €23,315 million Expenses = €11 million. Therefore, expenses must equal €23,304 million.

Nokia’s ROE: €11 / [(€15,401 + €15,371)/2] = 0.0007 or 0.07%.

P1-44. (20 minutes)

LO 3, 5 a.