As background for this analysis, let’s examine some relationships in Stimson Company, which has the following condensed balance sheet:

If net income was $81,000, Stimson Company’s return on equity (ROE)
was Net income 4 Equity, or %.

Transcribed Image Text:

Assets Liabilities and Equity $ 600,000 Total liabilities Total equity 900,000 Total $1,500,0000 Total $1,500,000