The firm's net fixed assets increase and the accumulated depreciation increases. How is this possible? The firm purchased fixed assets and kept its previous fixed assets. The firm sold its previous fixed assets and acquired new fixed assets. The firm used its depreciation to fund its working capital.
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.
12 The firm's net fixed assets increase and the accumulated
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