Ryan
Company

Priest
Company



Ryan
Company

Priest
Company


Data from the current year-end balance sheets

Data from the current year’s income statement


Assets





Sales
$
780,000
$
883,200


Cash
$
21,000
$
31,000

Cost of goods sold

594,100

644,500


Accounts receivable, net

33,400

55,400

Interest expense

9,300

13,000


Current notes receivable (trade)

10,000

8,400

Income tax expense

14,992

24,383


Merchandise inventory

84,340

142,500

Net income

161,608

201,317


Prepaid expenses

5,500

7,350

Basic earnings per share

4.49

5.14


Plant assets, net

320,000

312,400





















Total assets
$
474,240
$
557,050



























Beginning-of-year balance sheet data


Liabilities and Equity





Accounts receivable, net
$
30,800
$
55,200


Current liabilities
$
69,340
$
100,300

Current notes receivable (trade)

0

0


Long-term notes payable

83,800

113,000

Merchandise inventory

61,600

111,400


Common stock, $5 par value

180,000

196,000

Total assets

438,000

372,500


Retained earnings

141,100

147,750

Common stock, $5 par value

195,000

200,000















Total liabilities and equity
$
474,240
$
557,050

Retained earnings

115,300

94,600

The formula for Return on Common Equity is:

Return on Common Equity = (Net Income - Preferred Stock Dividends) / Common Stockholders Equity


Note: Return on Common Equity is expressed as a percentage, so you need to take your answer times 100 to get your percentage.