1. Use the following information to answer this question.

Bayside, Inc. 2017 Income Statement ($ in thousands)
Net sales	$	6,090
Cost of goods sold		4,300
Depreciation		410
Earnings before interest and taxes	$	1,380
Interest paid		34
Taxable income	$	1,346
Taxes		404
Net income	$	942

Bayside, Inc. 2016 and 2017 Balance Sheets ($ in thousands)
		2016			2017				2016			2017
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 2017?

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Multiple Choice

21.17%

22.54%

14.14%

21.85%

30.25%

2. Use the following information to answer this question.

Windswept, Inc. 2017 Income Statement ($ in millions)
Net sales	$	9,000
Cost of goods sold		7,350
Depreciation		360
Earnings before interest and taxes	$	1,290
Interest paid		87
Taxable income	$	1,203
Taxes		421
Net income	$	782

Windswept, Inc. 2016 and 2017 Balance Sheets ($ in millions)
		2016			2017				2016			2017
Cash	$	160		$	190		Accounts payable	$	1,150		$	1,332
Accounts rec.		840			740		Long-term debt		1,000			1,233
Inventory		1,570			1,565		Common stock		3,190			2,910
Total	$	2,570		$	2,495		Retained earnings		470			720
Net fixed assets		3,240			3,700
Total assets	$	5,810		$	6,195		Total liab. & equity	$	5,810		$	6,195

What is the equity multiplier for 2017?

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Multiple Choice

1.71 times

3.09 times

2.13 times

1.27 times

2.48 times