A company has total assets of $2,500,000, total liabilities of $1,200,000, and net income of $300,000. Calculate the return on equity (ROE). Discuss the significance of ROE in evaluating a company’s financial performance and shareholder returns. Analyze the potential factors that could influence changes in ROE, such as variations in net income, asset base, and financial leverage. Consider the implications of a high or low ROE for the company’s investment attractiveness and financial health. Discuss the strategic importance of optimizing ROE, including managing profitability, asset efficiency, and financial leverage. Explain how ROE can be used in performance evaluation, benchmarking, and strategic decision-making. Discuss the limitations of ROE and how it can be complemented with other financial ratios and qualitative assessments to provide a comprehensive view of financial performance.