Starlight Cruises reported net income of $2,880 million for the year ended December 31, 2016. Total stockholders' equity for the year ended December 31, 2016 was $20,100 million and on December 31, 2015, it was $20,900 million. No preferred stock was outstanding in either year.
REQUIRED:
1. Compute Starlight's return on common stockholders' equity for the year ended December 31, 2016.
2. What other ratio would you want to compute to decide whether Starlight is successfully employing leverage? Explain your answer.

Question

Quizplus · Accepted Answer

The Answer of Starlight Cruises reported net income of $2,880 million for the year ended December 31, 2016. Total stockholders' equity for the year ended December 31, 2016 was $20,100 million and on December 31, 2015, it was $20,900 million. No preferred stock was outstanding in either year.
REQUIRED:
1. Compute Starlight's return on common stockholders' equity for the year ended December 31, 2016.
2. What other ratio would you want to compute to decide whether Starlight is successfully employing leverage? Explain your answer.

Starlight Cruises Reported Net Income of $2,880 Million for the Year