Which financial statement(s)do you need to calculate return on equity?
A)only the income statement
B)only the balance sheet
C)both the income statement and the balance sheet
D)the income statement,the balance sheet,and the statement of cash flows

Question

Quizplus · Accepted Answer

Return on equity is calculated by dividing net income (from the income statement) by shareholder's equity (from the balance sheet). Both statements are necessary to calculate return on equity. The statement of cash flows is not directly used in calculating return on equity.

Which Financial Statement(s)do You Need to Calculate Return on Equity