11. The following companies have different financial statistics. Growth rate in sales and earnings Cash as a percentage of total assets a. What dividend policy would you recommend for Turtle Co.? multiple choice 1 Low payout ratio High payout ratio Turtle Co. 6% b. What dividend policy would you recommend for Hare Corp.? multiple choice 2 High payout ratio Low payout ratio 20 Hare Corp. 25% 5

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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.