Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Transcribed Image Text:1 payback period(expressed in years,months and
days
2. Accounting rate of return on avarage
investment (expressed to two decimal)
referred to the case study
empire limited was established in gauteng in
2017, manufacturing medical equipment and
supplies with an initial capital of 5000 000,
ordinary shares that were issued at R1 each, the
sales of the company which are all on credit,grew
steadily during 2018 and 2019 but increase
rapidly during 2020 and 2019 but increased
rapidly during 2020 and 2021 following the
business opportunity presented to the company
by covid-19. the sales for 2021, the accumulated
undistributed profit amount to 6000 000, 9000
000 was owned to trade creditors, investors
amounted to 5 500 000 and amount of 4000
000 was owned to nap bank in respect of long
term loan
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