Apollo Corp.reported the following balance sheet: Apollo has sales of $600,000 and net income of $50,000.Apollo's return on equity is
A)5.00%.
B)50.00%.
C)38.17%.
D)41.13%.

Question

Apollo Corp.reported the following balance sheet:  Apollo has sales of $600,000 and net income of $50,000.Apollo's return on equity is
A)5.00%. 
B)50.00%. 
C)38.17%. 
D)41.13%.

Quizplus · Accepted Answer

Return on Equity (ROE) is calculated as Net Income divided by Shareholder's Equity. 
ROE = (($50,000)/($800,000)) x 100% = 6.25%
Therefore, the correct answer is C as it is the closest choice to the calculated ROE.