The Harrison Bicycle Company had the following operating results for 2018-2019. In addition, the company paid dividends in both 2018 and 2019 of $270,000 per year and made capital expenditures in both years of $230,000 per year. The company's stock price in 2018 was $14.20 and $12.50 in 2019. Also in 2019, the industry average earnings multiple for the bicycle industry was 8 and the free cash flow and sales multiples were 16 and 1.35, respectively. The company is publicly owned and has 1,800,000 shares of outstanding stock at the end of 2019.

Balance Sheet, Dec 31,
	2019			2018
Cash	$	277,000		$	110,000
Accounts Receivable	$	535,000		$	410,000
Inventory	$	460,000		$	310,000
Total Current Assets	$	1,272,000		$	830,000
Long-lived Assets		1,255,000			1,150,000
Total Assets	$	2,527,000		$	1,980,000
Current Liabilities	$	510,000		$	310,000
Long-term Debt		700,000			600,000
Shareholder Equity		1,317,000			1,070,000
Total Debt and Equity	$	2,527,000		$	1,980,000

Income Statement, for year ended Dec 31,
	2019			2018
Sales	$	6,300,000		$	5,540,000
Cost of Sales		5,045,000			4,460,000
Gross Margin		1,255,000			1,080,000
Operating Expenses		480,000			470,000
Operating Income		775,000			610,000
Taxes		258,000			196,000
Net Income	$	517,000		$	414,000

Cash Flow From Operations	2019				2018
Net Income	$	517,000			$	414,000
Plus Depreciation Expense		125,000				125,000
+ Decrease (-inc) in AccRec. and Inv.		(275,000	)			-
+ Increase (-dec) in Cur. Liabl.		200,000				-
Cash Flow from Operations	$	567,000			$	539,000

Return on equity for 2019 is (rounded):

Multiple Choice

• 31.6%

• 43.3%

• 32.1%

• 28.2%