An extract from a boat retailer’s 2020 financial statements follows: Income statement Year ended December 31, 2020 Year ended December 31, 2019 Net income 12,866 11,242 Balance sheet As of December 31, 2020 As of December 31, 2019 Total stockholders’ equity 3,299 (3,116) What was the company’s return on equity for 2020?
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.
An extract from a boat retailer’s 2020 financial statements follows:
|
Income statement |
Year ended December 31, 2020 |
Year ended December 31, 2019 |
|
Net income |
12,866 |
11,242 |
|
|
|
|
|
Balance sheet |
As of December 31, 2020 |
As of December 31, 2019 |
|
Total |
3,299 |
(3,116) |
What was the company’s
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