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    Divachic26's Avatar
    Divachic26 Posts: 4, Reputation: 1
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    #1

    Feb 8, 2008, 10:35 PM
    Return on equity
    A firm with sales of $1,000,000, net profits after taxes of $30,000, total assets of $1,500,000, and total liabilities of $750,000 has a return on equity of what percent?
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Feb 9, 2008, 11:19 PM
    "Return" means the net income. Most of these ratios that you get will be the first item divided by the second item.

    As for the equity, this is going back to your accounting equity. You should definitely know your accounting equity as much of this is built upon that, and you can solve for equity with the information you have.

    Give it a try.
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