[bucklegirl]

	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

[pready]

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.