Check my work Comparative balance sheets for Softech Canvas Goods for 2018 and 2

Question

Check my work Comparative balance sheets for Softech Canvas Goods for 2018 and 2017 are shown below. Softech pays no dividends, and instead reinvests all earnings for future growth. Comparative Balance Sheets in 000s) 2 points December 31 2018 2017 Assets: Cash Accounts receivable Short-term investments Inventory Property, plant, and equipment (net) $ 71 135 64 270 740 $ 54 155 54 182 655 eBook Print References $1,280 $1,100 Liabilities and Shareholders' Equity Current liabilities Bonds payable Paid-in capital Retained earnings $ 310 195 505 $ 245 195 505 155 2701 $1,280 $1,100 Required 1. Determine the return on shareholders' equity for 2018. (Round your answer to 2 decimal places.) n on shareholders' eq

Explanation / Answer

1. Return on shareholders' equity = Net income / Average shareholders' equity

where, Net income = $270 - $155 = $115

Average shareholders' equity = [$775 + $660] / 2 = $717.5

Return on shareholders' equity = $115 / $717.5 = 16.03%

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