Question on Accounting homework

label Accounting
account_circle Unassigned
schedule 1 Day
account_balance_wallet $5

Dec 14th, 2014

Let's start with formula for Return on equity:

Return on Equity = Net Income/Shareholder's Equity

Net income (Given in Question for the year 2010) = $ 200,000

Shareholder's equity for 2010 = $ 465,000 (For year 2010) 

So using the formula

Return on Equity = Net Income/Shareholder's Equity

Return on Equty = 200,000 (Net Income) / 465,000 (Shareholder's equity) 

Return on Equity = 0.43 

Now, lf we convert 0.43 to a percentage since we have to answer in percentage

0.43 = 43%

Dec 14th, 2014

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Dec 14th, 2014
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Dec 14th, 2014
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