Ally's Allied Apples has net profit after taxes of $30, total assets of $989, sales of $979, owner's equity of $990, and interest expense of $56. Which of the following is the return on equity for this business?
A) 0.030
B) 0.057
C) 0.989
D) 1.87

Question

Quizplus · Accepted Answer

Return on Equity (ROE) is calculated as Net Income divided by Shareholder's Equity. Here, ROE = $30 / $990 = 0.030.

Ally's Allied Apples Has Net Profit After Taxes of $30