Given the following Year 12 Financial Statement data for a footwear company:
| Income Statement Data |
|
|
Year 12 (in 000s) |
| Net Revenues from Footwear Sales |
|
|
$ 340,000 |
| Operating Profit (Loss) |
|
|
80,000 |
| Net Profit (Loss) |
|
|
$ 49,000 |
|
|
|
|
| Balance Sheet Data |
|
|
|
| Cash on Hand |
|
|
3,000 |
| Total Current Assets |
|
|
$ 70,000 |
| Total Assets |
|
|
310,000 |
| Overdraft Loan Payable |
|
|
1,000 |
| 1-Year Bank Loan Payable |
|
|
16,000 |
| Current Portion of Long-term Loans |
|
|
10,000 |
| Total Current Liabilities |
|
|
51,000 |
| Long-Term Bank Loans Outstanding |
|
|
70,000 |
| Shareholder Equity: |
Year 11 Balance |
Year 12 Change |
|
| Common Stock |
10,000 |
0 |
10,000 |
| Additional Capital |
120,000 |
0 |
120,000 |
| Retained Earnings |
30,000 |
29,000 |
59,000 |
| Total Shareholder Equity |
160,000 |
+29,000 |
189,000 |
| Based on the above figures and the formula for calculating return on average equity found on p. 30 of the Player's Guide, the company's Return on Average Equity (the definition of ROE used in scoring company performance) in Year 12 |
 |
|
14.0%. |
|
|
28.1%. |
|
|
42.3%. |
|
|
None of these. |
|
|
25.9%. |