Profitability Ratios

Vanderwood Publications is a magazine publisher established in Southern California. Financial analysts are concerned about Vanderwoods ability to generate positive returns as printed material becomes less popular than digital material. Financial analysts observe the following account balances from Vanderwood to determine financial ratios:

Revenue	$1,540,000
Expenses	945,000
Net income	385,000
Assets	875,000
Liabilities	253,750
Average equity	900,000

Required:

Compute Vanderwoods return on equity. Round your answer to one decimal place. fill in the blank 1%