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Both return on asset and return on equity measure profitability which one is more useful for comparing two companies why?
Return on asset= profit margin × asset turnover Return on equity= return on asset × equity multiplier so, return on equity is more comprehensive
Is return on equity a profit or dividend?
Return on equity is influenced by profits and not from dividends.
Difference between retrun on equity and return on capital employed?
return on capital employed (ROCE) is net income/(debt&equity) whereas return on equity is income/equity (without debt).
What is the difference between return on equity and return on net worth?
Return on equity is the rate of returns you earned on your equity investments Return on net worth is the rate at which your entire property is growing (Your net worth is the sum of all your assets - all your liabilities)
Is there any relationship between return on equity and dividend yield?
if there is no growth in a firm the return of equity is equal to the dividend yield
What is a leverage multiplier ratio?
the return on equity divided by the return on assets
How is the accounting rate of return on stockholders investments measured?
return on equity
Where can a person find an explanation detailing the definition of return on equity?
The definition of return on equity is the amount of net income returned as a percentage of shareholders equity. More information can be found at Investopedia and Wikipedia.
What is the equity of a commercial bank?
return investment
Return on equity equals return on assets?
When the debt ratio is zero
How can one calculate and analyze the return on stockholders' equity for a company?
To calculate and analyze the return on stockholders' equity for a company, divide the company's net income by its average stockholders' equity. This ratio shows how efficiently the company is generating profits from the shareholders' investments. A higher return on equity indicates better performance and profitability.
A company is effectively leveraging when?
The return on shareholders' equity exceeds the return on assets
