Use the following information to solve for ROE. Your answer should be entered as a percent....

Use the following information to solve for ROE. Your answer should be entered as a percent. For example 7.31% should be entered as 7.31. Include two decimals and a negative if appropriate

Current Assets are $98, net fixed assets are $115, total common equity is $178

Revenue is $194, total operating expenses are $63, depreciation expense is $32

Interest expense is $43 and taxes are $32

Solutions

Expert Solution

Answer:

Net Income = Revenue – Total Operating Expense – Depreciation Expenses – Interest Expense – Tax
Net Income = $194 - $63 - $32 - $43 - $32
Net Income = $24

ROE = Net Income / Total Common Equity
ROE = $ 24 / $178
ROE = 0.1348 or 13.48

jeff jeffy answered 2 years ago

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