Question

The return on shareholders' equity for... Income statement: 2018 Sales $ 2,500,000 Cost of goods sold 1,300,000 Net income 200,000 Balance sheets: 2018 2017 Accounts receivable $ 300,000 $ 200,000 Total assets 2,000,000 1,800,000 Total shareholders' equity 900,000 700,000 The return on shareholders' equity for 2018 is:______

Answer 1

The return on shareholders' equity for 2018 is 22.2%

Step-by-step explanation:

Return on Equity measures the Return earned by the owners investments in the company.

Return on Equity = Net Income / Total Shareholders Funds × 100

= 200,000 / 900,000 ×100

= 22.2%