Assume that Pembrook Industries, Inc., has the following data:

Net income for 2018 ......................................................................................$ 104,000
Total stockholder’s equity, 12/31/2018.........................................................$ 935,000
Total stockholder’s equity, 12/31/2017.........................................................$ 889,000

Requirements

1. Calculate Pembrook Industries’ return on equity for 2018.

2. Comment on Pembrook Industries’ performance during 2018, assuming that the industry average is between 8 and 10 percent.