Corine’s Candies Inc. registered a gross profit margin of 75 percent on sales of $16 million in 2012. What would the company’s income statement show for the cost of goods sold?
At the end of 2011, Corine’s Candies Inc. had total shareholders’ equity of $13.8 million. In 2012, the company had net income of $5.2 million and paid out half this amount in dividends, resulting in shareholders’ equity at the end of 2012 of $16.4 million. Use the average amount of shareholders’ equity to determine Corine’s ROE for 2012.