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Question: use the following balance sheet and income statement to calculate...

Question details

Use the following balance sheet and income statement to calculate the firm's return on equity (net income / common equity):

Balance Sheet

Income Statement

Assets:

Cash

$3,000

Sales (all credit)

$85,000

Accounts Receivable

5,000

Cost of Goods Sold

(51,000)

Inventories

6,500

Land

20,000

Operating Expenses

(15,000)

Other Fixed Assets

18,000

Depreciation

(1,000)

Liabilities & Owners' Equity

  Interest Expense

(3,000)

Accounts Payable

4,000

Long Term Debt

26,700

  Taxes

(5,100)

Common Stock

5,000

Paid in Capital

12,000

Retained Earnings

4,800

50.4%
45.4%
41.6%
58.9%
58.2%
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