Return on equity can be computed by dividing net income by stockholders equity. It can also be
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Return on equity can be computed by dividing net income by stockholders’ equity. It can also be computed by multiplying return on sales, asset turnover, and the assets-to-equity ratio. Using the definitions of the various ratios, show why both of these approaches yield the same answer.
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Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
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