Practice - Return on Equity (ROE)
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Practice Questions
Test your understanding with targeted questions
What is ROE and how is it calculated?
💡 Hint: Think about what ROE measures in terms of company performance.
What does a high ROE indicate?
💡 Hint: Consider the implications of a company effectively using its resources.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What does ROE stand for?
💡 Hint: Think about what the measure is about – it involves equity!
True or False: A low ROE is always detrimental for a company.
💡 Hint: Consider the context of the industry.
1 more question available
Challenge Problems
Push your limits with advanced challenges
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.
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.
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