If a firm uses external financing, has capital budget of $4 million, net income of $2.5 million and retention ratio of 60%. What is the external financing needed? $4,000,000 $2,500,000 None of the above $1,500,000 Plz answer fast i give up vote
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.
If a firm uses external financing, has capital budget of $4 million, net income of $2.5 million and retention ratio of 60%. What is the external financing needed?
$4,000,000
$2,500,000
None of the above
$1,500,000
Plz answer fast i give up vote
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