Acc306 Intermediate Accounting: E18-24 Comparative balance sheets for Softech Canvas Goods

Acc306 Intermediate Accounting
Week 4

E18–24 Profitability ratio
Comparative balance sheets for Softech Canvas Goods for 2011 and 2010 are shown below. Softech pays no dividends, and instead reinvests all earnings for future growth.
Comparative Balance Sheets ($ in 000s)
December 31
2011 2010
Assets:
Cash 50 40
Accounts Receivable 100 120
Short-term receivable 50 40
Inventory 200 140
Property, plant and equipment (net) 600 550
Total Assets $1,000 $890
Liabilities and Shareholders' eQuity:
Current Liabilities 240 210
Bonds Payable 160 160
Paid-in Capital 400 400
Retained Earnings 200 120
$1,000 $890

Required:
1.Determine the return on shareholders’ equity for 2011.
2. What does the ratio measure?
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