Use the following information to answer this question. bayside, inc. 2010 income statement ($ in thousands) net sales $ 6,090 less: cost of goods sold 4,300 less: depreciation 410 earnings before interest and taxes $ 1,380 less: interest paid 34 taxable income $ 1,346 less: taxes 404 net income $ 942 bayside, inc. 2009 and 2010 balance sheets ($ in thousands) 2009 2010 2009 2010 cash $ 125 $ 230 accounts payable $ 1,630 $ 1,580 accounts rec. 1,030 870 long-term debt 830 630 inventory 1,745 2,060 common stock $ 3,280 $ 3,300 total $ 2,900 $ 3,160 retained earnings 900 1,150 net fixed assets 3,740 3,500 total assets $ 6,640 $ 6,660 total liab. & equity $ 6,640 $ 6,660 what is the return on equity for 2010?

RETURN ON EQUITY21,17%

$942,000/$4,450,000 = 21,17%

Explanation:

The ROE let see if the investors are getting a good return on their investment., while the company can measure how efficiently they are in the use of the equity.

2009      2010BALANCE SHEETS

$125,000$230,000Cash

$1.030,000$870,000Accounts Receivable

$1.745,000$2.060,000Inventory

$2.900,000$3.160,000  TOTAL CURRENT ASSETS  

$3.740,000$3.500,000Property and Equipment

$3.740,000$3.500,000  TOTAL NONCURRENT ASSETS  

$6.640,000$6.660,000  TOTAL ASSETS  

$1.630,000$1.580,000  Accounts Payable

$1.630,000$1.580,000  TOTAL CURRENT LIABILITIES  

$830,000$630,000  Long-Term Debt

$830,000$630,000  TOTAL NONCURRENT LIABILITIES  

$2.460,000$2.210,000  TOTAL LIABILITIES

$3.280,000$3.300,000  Common Stock  

$900,000$1.150,000  Retained Earnings  

$4.180,000$4.450,000  TOTAL SHAREHOLDERS SEQUITY  

$6.640,000$6.660,000  TOTAL EQUITY & LIABILITIES  

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