Refer to the income statement above. Luther's return on equity (ROE) for the year ending December 31, 2005 is closest to ________
Luther Corporation
Consolidated Income Statement
Year ended December 31 (in $millions)
2006 2005
Total sales 610.1 579.1
Cost of sales -500.2 -378.8
Gross profit 109.9 200.3
Selling, general, and
administrative expenses -40.5 -39.6
Research and development -24.6 -20.9
Depreciation and amortization -3.6 -3.7
Operating income 41.2 136.1
Other income -- --
Earnings before interest and taxes (EBIT) 41.2 136.1
Interest income (expense) -25.1 -15.2
Pretax income 16.1 120.9
Taxes -5.5 -42.315
Net income 10.6 78.585
Price per share $16 $15
Sharing outstanding (millions) 10.2 8.0
Stock options outstanding (millions) 0.3 0.2
Stockholders' Equity 126.6 63.6
Total Liabilities and Stockholders' Equity 533.1 386.7
A) 247.12%
B) 98.85%
C) 123.56%
D) 148.27%
Answer: C
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