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.
4. What type of firm generally has the highest proportion of fixed assets to total
assets?
a) Manufacturers.
b) Retailers.
c) Wholesalers.
d) Retailers and wholesalers
Fixed Assets:
These are non-current assets purchased and utilized for the long term.
Such assets are not likely to be converted to cash quickly.
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