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.
Tom Inc. report a $30million of net income. its EBIT is 50millions, the flat tax rate is 25%? What was its interest expense (in million)?

Solution:-
Earnings before interest and tax (EBIT) means the net operating income of an entity. The entity pays interest and tax expense from it and compute its net income.
Step by step
Solved in 3 steps









