Scranton Shipyards has $10million of sales and $6million of operating costs including depreciation. The company has $20million of investor-supplied operating capital that has a cost of capital of 10%. What is the firm's Economic Value Added (EVA) given the company's overall tax rate of 40%?$441,000$420,000$400,000$463,050

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A:

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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.