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 investment will pay $150 at the end of each of the next 3 years, $250 at the end of Year 4,
$300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 11%
annually, what is its
Please provide full solution not on excel
The value of money at present is known as the present worth of the money while the value of money in sometime in future is known as future worth of money. The present value of money is computed by discounting the future cash flows with the appropriate discounting rate.
The formula to compute the present value of the future cash flow is provided below.
Where,
The future value is FV.
The present value is PV.
The interest rate is i.
The number of periods is n.
Step by step
Solved in 4 steps with 3 images
