What is the formula for calculating the return on equity (ROE)?
Practice Questions
1 question
Q1
What is the formula for calculating the 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 the 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.
