Use the following data to calculate the return on equity for Mighty Motors (MM), Inc. At the
Question:
Use the following data to calculate the return on equity for Mighty Motors (MM), Inc. At the beginning of 2010, MM’s current assets totaled $57,855; total assets totaled $449,999; and total liabilities totaled $424,424. For the year ended December 31, 2010, net income was $3,822. At the end of 2010, the current assets were $62,397; total assets were $369,053; and total liabilities were $361,960. Mighty Motors has no preferred stock. Calculate the return on equity (ROE) for MM for 2010. Make sure you use average shareholders’ equity in your calculation.
Step by Step Answer:
Net Income 3822 2340 Avg SH equity 16334 B...View the full answer
Financial Accounting: A Business Process Approach
ISBN: 978-0136115274
3rd edition
Authors: Jane L. Reimers
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
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