Which of the following could NOT explain an increase in the return on equity ratio?
A) Share buyback
B) Declaring a final dividend
C) Increase in gross profit
D) Purchase of land on credit

Question

Quizplus · Accepted Answer

Purchasing land on credit would increase assets and liabilities on the balance sheet, but would not directly affect the return on equity ratio. The other choices, share buyback, declaring a final dividend, and an increase in gross profit, could all lead to an increase in return on equity.

Which of the Following Could NOT Explain an Increase in the Return