Question

Use the following information to answer this question Windswept, Inc. 2017 Income Statement ($ in millions) Net sales Cost of goods Sold Depreciation Earnings before interest and taxes Interest paid Taxable income Taxes Net income $8,600 7,290 400 $ 910 80 $ 830 291 $539 Windswept, Inc. 2016 and 2017 Balance Sheets (ş in millions) 2017 2016 $ 140 $ 175 Accounts payable 2017 $1,150 $1,205 990 1,255 3,190 2,890 700 2016 Cash Accounts rec. Inventory Total Net fixed assets Total assets 900 1,500 1,535 Common stock 700 Long-term debt $2,540 $2,410 Retained earnings 450 3,240 3,640 $5,780 6,050 Total liab. & equity $5,780 $6,050 What is the return on equity for 2017?

Answer 1

Return on Equity for 2017,

Return on Equity = Net Income/Total Equity

Return on Equity = 539/(2890+700)

Return on Equity = 539/3590

Return on Equity = 15.02%