Question

15. Apple-Space year-end balance sheets follow.

At December 31	2017			2016			2015
Assets
Cash	$	31,400		$	34,100		$	37,300
Accounts receivable, net		89,100			63,200			60,000
Merchandise inventory		26,906			84,700			56,200
Prepaid expenses		11,020			10,084			3,557
Plant assets, net		421,574			297,916			172,943
Total assets	$	580,000		$	490,000		$	330,000
Liabilities and Equity
Accounts payable	$	144,420		$	81,982		$	44,431
Long-term notes payable secured by mortgages on plant assets		110,130			116,081			75,118
Common stock, $10 par value		162,500			162,500			162,500
Retained earnings		162,950			129,437			47,951
Total liabilities and equity	$	580,000		$	490,000		$	330,000

The company’s income statements for the years ended December 31, 2017 and 2016, follow.

For Year Ended December 31	2017						2016
Sales				$	754,000					$	583,100
Cost of goods sold	$	459,940					$	379,015
Other operating expenses		233,740						147,524
Interest expense		12,818						13,411
Income taxes		9,802						8,747
Total costs and expenses					716,300						548,697
Net income				$	37,700					$	34,403
Earnings per share				$	2.32					$	2.12

Additional information about the company follows.

Common stock market price, December 31, 2017	$	31.00
Common stock market price, December 31, 2016		29.00
Annual cash dividends per share in 2017		0.30
Annual cash dividends per share in 2016		0.15

To help evaluate the company's profitability, compute the following ratios for 2017 and 2016:

1. Return on common stockholders' equity.

Answer 1