Question

On December​ 31, Mercury Corporation has the following data​ available: Net Income ​$180,000 Interest expense ​10,000 Total assets at the beginning of the year ​810,000 Total assets at the end of the year ​740,000 Total common​ stockholders' equity at the beginning of the year ​520,000 Total common​ stockholders' equity at the end of the year ​510,000 What is return on​ equity? (Round your final answer to two decimal​ places, X.XX%)

Answer 1

Mercury company

Net Income ​$180,000

Interest expense ​10,000

Earnings before tax = $170,000

Total assets at the beginning of the year ​810,000

Total assets at the end of the year ​740,000

Total common​ stockholders' equity at the beginning of the year ​520,000

Total common​ stockholders' equity at the end of the year ​510,000

Return on​ equity = Net income divided by Shareholders equity

= $170,000 / $510,000

= 33.33%