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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