Maguad 1
Jhenicah Maguad
Professor Sanchez
ACCT 124
14 December 2017
Domino’s Pizza Inc. (DPZ)
➢Return on Stockholders’ Equity = Net Income/Average Total Stockholders’ Equity
( 192,789 / 1,800,251 = $0.11 )
The return on stockholders’ equity measures the rate of income earned on the amount
invested by the stockholders. It is calculated by dividing net income by the average total
stockholders’ equity. Its purpose is to measures a corporation’s profitability by revealing how
much profit a company generates with the money shareholders has invested. Return on equity or
ROE is also the amount of net income returned as a percentage of shareholders equity. Net
income is for the full fiscal year before dividends paid to common stockholders but after
dividends to preferred stock. Shareholders’ equity does not include preferred shares. This ratio
reveals the percentage of profit a company earns in relation to its overall resources. This ratio is
important since it determines whether the company is doing well overall as a business and if they
are able to return dividends to all its shareholders.
http://finance.yahoo.com/q/bs?s=DPZ+Balance+Sheet&annual
Maguad 2
➢Ratio of Liabilities to Stockholders’ Equity = Total Liabilities/Total Stockholders’
Equity
( 2,600,096 /1,800,251 = $1.44 )
The ratio of liabilities to stockholders’ equity measures how much of the company is
financed by debt and equity. It is computed by dividing its total liabilities by the total
stockholders’ equity. Small businesses and big corporations uses this ratio. This ratio determines
whether they are on a good track when it comes to their equity and debts that could possibly
affect stockholders equity. The main advantage of equity financing compared to debt financing is
that there is no obligation to repay the money acquired through equity financing. Equity
