return on equity capital is calculated on the basis of
Answers
Answer:
Return on equity (ROE) is a measure of financial performance calculated by dividing net income by shareholders' equity. Because shareholders' equity is equal to a company's assets minus its debt, ROE is considered the return on net assets.
Answer:
It is calculated on the basis of Net Income and Average of All the Shareholders Equity
Explanation:
Return on equity (ROE) is a measure for calculating the financial performance by dividing net income by shareholders' equity.
Share Holders Equity= Company Assets - debt
From the Above Equation Return on Equity is also considered as the return on net assets.
Return on Equity= Net Income/ Average Shareholders’ Equity
Net income is the amount of income, net expenses, and taxes that a company generates in a given period.
Average shareholders' equity is calculated by adding the equity at the beginning of the period. The beginning and end of the period should coincide with the period during which the net income is earned.
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