Question: Use the following data to calculate the return on equity
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.
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