Practice Return on Equity (ROE) - 19.2.3.d | 19. Financial Statement Analysis – Ratio Analysis | Management 1 (Organizational Behaviour/Finance & Accounting)
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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is ROE and how is it calculated?

💡 Hint: Think about what ROE measures in terms of company performance.

Question 2

Easy

What does a high ROE indicate?

💡 Hint: Consider the implications of a company effectively using its resources.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does ROE stand for?

  • Return on Earnings
  • Return on Equity
  • Return on Expenses

💡 Hint: Think about what the measure is about – it involves equity!

Question 2

True or False: A low ROE is always detrimental for a company.

  • True
  • False

💡 Hint: Consider the context of the industry.

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Challenge Problems

Push your limits with challenges.

Question 1

A firm has a net income of $1,200,000 and shareholders' equity of $5,000,000. Calculate the ROE and explain its significance.

💡 Hint: Start by plugging in the numbers into the formula.

Question 2

Considering two companies within the same industry, Company A has an ROE of 15% and Company B has 10%. Discuss what these figures might imply for potential investors.

💡 Hint: Reflect on how these ratios may affect investor choices.

Challenge and get performance evaluation