A commercial Bank in Zambia has a net profit after taxes of K10 million with an asset base of K100 million. It is also noted that the equity capital investment for the bank amounts to K20 million. Based on the foregoing, calculate the Return on Equity (RoE) and Return on Assets (RoA). Ensure to also comment on the relationship between the two performance parameters ROE and ROA.
A commercial Bank in Zambia has a net profit after taxes of K10 million with an asset base of K100 million. It is also noted that the equity capital investment for the bank amounts to K20 million. Based on the foregoing, calculate the Return on Equity (RoE) and Return on Assets (RoA). Ensure to also comment on the relationship between the two performance parameters ROE and ROA.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Practice Pack
A commercial Bank in Zambia has a net profit after taxes of K10 million with an asset base of K100 million. It is also noted that the equity capital investment for the bank amounts to K20 million. Based on the foregoing, calculate the Return on Equity (RoE) and Return on Assets (RoA). Ensure to also comment on the relationship between the two performance parameters ROE and ROA.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Includes step-by-step video
Learn your way
Includes step-by-step video
Step by step
Solved in 2 steps
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education