What are the firm’s ROE for 2018 and 2019?
|
Income Statements ($ in millions) |
Balance Sheets ($ in millions) |
||||
|
|
2018 |
2019 |
Assets |
2018 |
2019 |
|
Sales Revenue |
$2,580 |
$2,865 |
Cash |
$70 |
$50 |
|
Less: Cost of goods sold |
$1,060 |
$1,500 |
Short-Term investments |
$35 |
$9 |
|
Less: Operating Expenses |
$105 |
$162 |
Accounts rec. |
400 |
460 |
|
Less: |
$85 |
$80 |
Inventory |
490 |
556 |
|
Earnings before interest and taxes |
$1,330 |
$1,123 |
Total Current Assets |
$995 |
$1,075 |
|
Less: Interest paid |
$350 |
$380 |
Net fixed assets |
1890 |
1,910 |
|
Taxable Income |
$980 |
$743 |
|
||
|
Less: Taxes (40%) |
$392 |
$297 |
Total assets |
$2,885 |
2,985 |
|
Net income |
$588 |
$446 |
Liabilities and Owner's Equity |
|
|
|
Dividends (45%) |
$265 |
$201 |
2018 |
2019 |
|
|
Additions to |
$323 |
$245 |
Accounts payable |
$240 |
$210 |
|
|
Accruals |
$20 |
$20 |
||
|
|
Notes payable |
65 |
74 |
||
|
|
Total Current Liabilities |
$325 |
$304 |
||
|
|
Long-term debt |
884 |
1090 |
||
|
|
Total Liabilities |
$1,209 |
$1,394 |
||
|
|
Common stock |
1341 |
1011 |
||
|
|
Retained earnings |
335 |
$580 |
||
|
|
Total Equity |
1676 |
$1,591 |
||
|
|
Total liab.& equity |
$2,885 |
$2,985 |
| a. |
20.45%, 19.80% |
|
| b. |
35.08%, 28.02% |
|
| c. |
22.79%, 15.56% |
|
| d. |
31.77%, 26.02% |
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