one of the largest grocery retailers in the United States, is headquartered in M

Question

one of the largest grocery retailers in the United States, is headquartered in Minneapolis. Suppose the following financial information (in millions) was taken from the company’s 2017 annual report: net sales $44,000, net income $400, beginning stockholders’ equity $2,600, and ending stockholders’ equity $2,925. There were no dividends paid on preferred stock. Compute the return on common stockholders’ equity. (Round answer to 2 decimal places, e.g. 12.56%.)

The return on common stockholders’ equity ratio %

Explanation / Answer

Average stockholders equity=(Beginning equity+Ending equity)/2

=(2600+2925)/2=$2762.5

Hence ROE=(Net income/Average stockholders equity)

=(400/2762.5)

=14.48%(Approx)

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