A company has cash of $350,000,common shares of $500,000,net income of $125,000,and sales of $400,000.What is the company's return on equity?

Name: A company has cash of $350,000,common shares of $500,000,net income of $125,000,and sales of $400,000.What is the company's return on equity?
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Question

Quizplus · Accepted Answer

Return on Equity (ROE) is calculated as Net Income divided by Shareholder's Equity. Here, Net Income is $125,000 and Shareholder's Equity is $500,000 (common shares). So, ROE = $125,000 / $500,000 = 0.25.

A Company Has Cash of $350,000,common Shares of $500,000,net Income