Dennis Company reported net income of $50,000 on sales of $300,000.The company has average total assets of $500,000 and average total liabilities of $100,000.What is the company's return on equity ratio?
A)10.0%
B)16.7%
C)12.5%
D)50.0%

Question

Quizplus · Accepted Answer

Return on equity = Net income ÷ Average stockholders' equity
Return on equity = Net income ÷ (Average total assets - Average total liabilities)
Return on equity = $50,000 ÷ ($500,000 - $100,000)= 12.5%

Dennis Company Reported Net Income of $50,000 on Sales of $300,000.The