What is the formula for calculating return on equity (ROE)?
Practice Questions
1 question
Q1
What is the formula for calculating return on equity (ROE)?
Net income / Total assets
Net income / Shareholder's equity
Total revenue / Total assets
Net income / Total liabilities
Return on equity (ROE) is calculated by dividing net income by shareholder's equity, indicating how effectively management is using a company’s assets to create profits.
Questions & Step-by-step Solutions
1 item
Q
Q: What is the formula for calculating return on equity (ROE)?
Solution: Return on equity (ROE) is calculated by dividing net income by shareholder's equity, indicating how effectively management is using a company’s assets to create profits.
