Import, Inc.
Import, Inc. has earnings available for common shareholders of $700 produced by sales of $10,000. It also has total assets of $20,000 and an assets to equity ratio of 2.5.
-What is Import Inc.'s return on common equity?

Question

Quizplus · Accepted Answer

ROE = (earnings avail for common/sales)´ (sales/TA)´ (TA/ equity)
= (700/10,000)´ (10,000/20,000)´ (20,000/8,000)= .0875

Import, Inc. Import, Inc. Has Earnings Available for Common Shareholders of $700