Exhibit 19-2
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 44

Multiple Choice

Exhibit 19-2
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{c} \text { STAR CORPORATION INCOME STATEMENT} \\ \text {FISCAL YEAR ENDING 12/31/2009 } \\ \text { (DOLLARS IN THOUSANDS') } \\\begin{array}{lr}\text { Net Sales } &\quad\quad\quad\quad\quad\quad\quad \$ 1075 \\\text { Cost of Goods Sold } & \underline {706 }\\ \text { Gross Profit Margin } & 369 \\\text { Depreciation } & 30 \\\text { Operating Expense } & 109 \\\text { Administrative Expense } & \underline {129} \\\text { Operating Profit } &101\\\text { Interest }\\ \text {Profit Before Taxes}&\frac{29}{72} \\ \text { Taxes } \\ \text {Net Income }&\$\frac{21}{51} \\\end{array}\end{array}$ $\begin{array}{c} \text { STAR CORPORATION BALANCE SHEET } \\ \text { FISCAL YEAR ENDING 12/31/2009 } \\ \text { (DOLLARS IN THOUSANDS) } \\\begin{array}{lll}\text { ASSETS }\\\hline\text { Cash } & \$ 69 \\\text { Accounts receivables } & 233 \\\text { Inventory } & \underline { 348} \\\text { Total current assets } &650 \\\text { Net fixed assets } & \underline { 886} \\\\\\\\\\\text { Total assets }& \$ 1536\\\end{array}\begin{array}{lll}\text { LIABILITIES }\\\hline\text { Notes payable } & \$ 231 \\\text { Accounts payable } & 146 \\\text { Accruals } & \underline { 31} \\ \text { Total current liabilities } & 408 \\\text { Long term debt } & 318\\\text { Common stock ( } \$ 1.50 \text { par) } & 111\\\text { Paid in surplus } & 190 \\\text { Retained earnings } & \underline { 509} \\\text { Total liabilities and } & \\\quad \text { Stockholders' equity } & \$ 1536\end{array}\end{array}$
-Refer to Exhibit 19-2. What was Star's return on equity in 2009?

• A) 5.8%
• B) 6.3%
• C) 6.8%
• D) 7.2%
• E) 8.1%

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Definitions:

Strategy

A planned series of actions or tactics aimed at achieving specific goals or outcomes, often used in the context of business, military, or games.

Public Entertainment

Forms of entertainment that are either performed or directly funded by the government or accessible to the public, often free of charge or for a nominal fee.

Wealth

An accumulation of valuable resources or possessions, including money, real estate, and investments, which can generate income.

Contribute

To give something, such as time, money, or knowledge, towards a common goal or cause.