If two companies have the same ROE, they will also have the same ROA.

Name: If two companies have the same ROE, they will also have the same ROA.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

ROE (Return on Equity) is calculated as net income divided by shareholder equity. ROA (Return on Assets) is calculated as net income divided by total assets. Therefore, two companies with the same ROE can have different levels of assets, resulting in different ROAs.

If Two Companies Have the Same ROE, They Will Also