Comparative balance sheets for Softech Canvas Goods for 2013 and 2012 are shown below. Softech pays no dividends, and instead reinvests all earnings for future growth.

Required:
1. Determine the return on shareholders’ equity for 2013.
2. What does the ratiomeasure?

Transcribed Image Text:

Comparative Balance Sheets (S in 000s) 2013 2012 Assets: Accounts receivable Short-term investments Inventory Property, plant, and equipment (net) $ 50 100 50 200 600 $ 40 120 40 140 550 $1.000 $890 Liabilities and Shareholders Equity: Current liabilities Bonds payable Paid-in capital Retained earnings $ 240 160 400 200 $1,000 $210 160 400 120 $890