Question
XYZ has a net profit of $ 2 million in 2021, total assets of 20 million and a debt ratio of 60%. Required 1.
XYZ has a net profit of $ 2 million in 2021, total assets of 20 million and a debt ratio of 60%. Required 1. Calculate the return on equity and explain what it means. 2. Explain whether the return on equity is affected by the business's debt ratio and how.
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a 60 of 20 million 60 100 x 20000000 12000000 RoE NET INCOME total equity 2000000 8 ...Get Instant Access to Expert-Tailored Solutions
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Financial Accounting and Reporting
Authors: Barry Elliott, Jamie Elliott
14th Edition
978-0273744535, 273744445, 273744534, 978-0273744443
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