Selected Balance Sheet and Income Statement Information for Forester Company

Essay

Selected balance sheet and income statement information for Forester Company follows in millions:
$$\begin{array} { l r } \text { Earnings before taxes } & \$ 850,175 \\\text { Average assets } & 5,456,781 \\\text { Net incame } & 1,614,471 \\\text { Average common stockholders' equity } & 4,481,322\end{array}$$ a. Calculate the company's return on common stockholders' equity.
b. Explain what information this provides to management.