Last year Atlantic Richfield had sales of $325000 Net income of $27200 The firm finances using only debt and common equity and total assets equal total invested capital. Year ended assets $250000 Debt ration was 15% What was their
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.
The return on equity is rate of return earned per value of equity and is the measure of profitability of the company.
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