Question

Use the following information to answer this question Windswept, Inc. 2010 Income Statement ($ in millions Net sales $10,500 8,200 495 $1,805 110 $1,695 Less: Cost of goods sold Less: Depreciation arnings before interest and taxes ess: Interest paid Taxable Income ess: Taxes Net income 593 $ 1,102 2009 2010 2009 2010 Cash $330 $365 Accounts payable $1,7602,030 1,445 60 $ 3,080 Accounts rec. nventory Total Net fixed assets Total assets 1,21 1,880 1,110 Long-term debt 1,820 Common stock 1,120 $3,420 $3,295 Retained earnings 700 95 $7040 $7,505 Total liab. & equity What is the return on equity for 2010? 33.70 percent 35.78 percent 27.34 percent O 58.60 percent O 44.79 percent

Answer 1

Return on equity:
= Net income/Ending equity
= $1,102/$4,030
= 27.34%
Hence, correct option is “27.34 percent”