Galaxy United, Inc. 2009 Income Statement ($ in millions) Net sales $8,550 Less:

Question

Galaxy United, Inc. 2009 Income Statement ($ in millions) Net sales $8,550 Less: Cost of goods sold 7,190 Less: Depreciation 410 Earnings before interest and taxes 950 Less: Interest paid 79 Taxable Income 871 Less: Taxes 305 Net income $ 566 Galaxy United, Inc. 2008 and 2009 Balance Sheets ($ in millions) 2008 2009 2008 2009 Cash $ 120 $ 150 Accounts payable $1,110 $1,140 Accounts rec. 940 780 Long-term debt 950 1,205 Inventory 1,490 1,530 Common stock $3,160 $2,960 Sub-total $2,550 $2,460 Retained earnings 510 775 Net fixed assets 3,180 3,620 Total assets $5,730 $6,080 Total liab. & equity $5,730 $6,080 What is the return on equity for 2009? rev: 01_14_2016_QC_CS-37830 15 percent 13 percent 16 percent 18 percent 10 percent

Explanation / Answer

Return on equity Net income/Average shareholders funds 15% 566/((3160+2960+510+775)/2)

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