When computing return on equity (ROE),it is best to divide profit by the year-end shareholders' equity amount rather than using an average shareholders' equity amount.

Name: When computing return on equity (ROE),it is best to divide profit by the year-end shareholders' equity amount rather than using an average shareholders' equity amount.
Brand: Quizplus
Rating: 4.8 (37 reviews)

Question

Quizplus · Accepted Answer

Using the average shareholders' equity provides a more accurate reflection of the equity base over the period, accounting for any changes throughout the year.

When Computing Return on Equity (ROE),it Is Best to Divide