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In the case of ROE, the calculation is income/equity. In the case of return on assets, the calculation is income/assets. Since these are ratios, the

In the case of ROE, the calculation is income/equity. In the case of return on assets, the calculation is income/assets. Since these are ratios, the value can be changed by either a change in the numerator, a change in the denominator, or some combination of the two.

What does this tell you about the care that must be taken when comparing return-related ratios between companies?

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