Question

How to calculate Return on Equity？（I just want to learn the formula, no specific data）

If the return on equity is low, how can it be improved?

Net Earnings per share
Retained earnings, beginning of the year
Dividends paid

Selling and Admin Expense
Operating Profit
Interest Expense

Income Taxes
Net Earnings

Retained earnings, end of year
Net Sales
Cost of goods sold
Other income (expense), net
Earnings before income taxes

Answer 1

Return on equity means equity shareholder expect the return of their investment during the specific period of time.It is calculated by deducting the preference dividend from net income divided by shareholder's equity. If the company had not paid any dividend then the ratio is net income divided by shareholder's equity.