Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 11

Calculate ROE At the beginning of the year, the net assets of Carby Co. were $346,800. The only transactions affecting owners’ equity during the year were net income of $42,300 and dividends of $12,000.

Required:

Calculate Carby Co.’s return on equity (ROE) for the year. Round your percentage answer to one decimal place.

Step 1 of 4

Return on Equity:

This is the net income that is returned to equity shareholders. Company profitability is measured by return on equity by revealing revenue generated by the company from the amount invested by shareholders.