PROFITABILITY RATIOS Brimfield Corporation’s balance sheet indicates the following balances as of December 31, 2009.

Cash $ 70,000 Accounts receivable 80,000 Inventory 55,000 Property, plant, and equipment 500,000 Accounts payable 75,000 Bonds payable (due in 2015) 100,000 Common stock (12/31/2008) 275,000 Common stock (12/31/2009) 325,000 Retained earnings (12/31/2008) 200,000 Retained earnings (12/31/2009) 260,000 Required:

If Brimfield’s 2009 net income is $80,000, determine its return on equity.

Cornerstone Exercise