Exercise 13-11 Financial Ratios for Assessing Profitability and Managing Debt [LO13-4, LO13-5]

Selected financial data from the June 30 year-end statements of Safford Company are given below:

Total assets	$	5,600,000
Long-term debt (11% interest rate)		$580,000
Total stockholders equity	$	2,100,000
Interest paid on long-term debt		$63,800
Net income		$370,000

Total assets at the beginning of the year were $5,400,000; total stockholders equity was $1,900,000. The companys tax rate is 35%.

2.	Compute the return on equity. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)