Galaxy United, Inc 2009 Income Statement ($ in millions) Net Sales $8,550 Less:
ID: 2729643 • Letter: G
Question
Galaxy United, Inc
2009 Income Statement
($ in millions)
Net Sales $8,550
Less: Cost of goods sold 7,180
Less: Depresiation 410
Earnings before interest & taxes 960
Less: Interest paid 77
Taxable Income 883
Less: taxes 309
Net Income $574
Galaxy United , Inc.
2008 & 2009 Balance Sheets
($ in millions)
2008 2009 2008 2009
Cash $ 120 $ 150 Accounts Payable $1,110 $1,130
Accounts Rec 950 780 Long-term debt 920 1,227
Inventory 1,470 1,510 Common stock $3,130 $2,930
Sub-Total $2,540 $2,440 Retained earnings 530 803
Net fixed assets 3,150 3,650
Total assets $5,690 $6,090 Total liab & equity $5,690 $6,090
What is the return on equtiy for 2009?
A) 10 percent
B) 13 percent
C) 16 percent
D) 18 percent
E) 15 percent
Explanation / Answer
Average Shareholders Equity Opening+ Closing/2 Opening 3130+530 3660 Closing 2930+803 3733 Average Shareholders Equity 3660+3733/2 3696.5 Return on Equity Net Income/ Average Shareholders Equity 574/3696.5 0.155282 Return On Equity 16% The correct answer is C) 16 Percent
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