The Following Information Pertains to Soho Company What Is the Return on Ordinary Shareholders' Equity for Soho

question 43

Multiple Choice

The following information pertains to Soho Company. Assume that all statement of financial position amounts represent both average and ending balance figures. Assume that all sales were on credit. $\begin{array}{lr}\text { Assets }\\\text { Property, plant and equipment } & \$ 210,000 \\\text { Inventory } & 20,000 \\\text { Accounts receivable (net) } & 25,000 \\\text { Cash and short-term investments } & 40,000 \\\quad \text { Total Assets } & \$ 295,000\\\\\text { Equity and Liabilities }\\\text { Shareholders' equity\_ordinary } & \$ 150,000 \\\text { Non-current liabilities } & 85,000 \\\text { Current liabilities } & 60,000 \\\text { Total Equity and Liabilities } & \$ 295,000 \\\\\text { Income Statement }\\\text { Sales revenue } & \$ 85,000 \\\text { Cost of goods sold } & 45,000 \\\text { Gross margin } & 40,000 \\\text { Operating expenses } & 20,000 \\\quad \text { Net income } & \$ 20,000 \\\\\text { Number of ordinary shares } & 6,000 \\\text { Market price of ordinary shares } & \$ 20 \\\text { Dividends per share } & .90\end{array}$ What is the return on ordinary shareholders' equity for Soho?

• A) 13.3%
• B) 5.0%
• C) 23.3%
• D) 53.3%

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Definitions:

Quadriceps Femoris

A muscle group consisting of four muscles on the front of the thigh that extend the knee.

Innervated

Supplied or stimulated by nerves.

Distal Phalanges

The bones at the tips of the fingers or toes, forming the end part of the digits.

Flexor Digitorum Longus

A muscle in the lower leg that flexes the toes and plays a crucial role in walking.