Asked by
Ali Kh A M Alradwan
on Oct 09, 2024
Verified
When computing the return on equity, retained earnings should be excluded from the average total stockholders' equity.
Return on Equity
A measure of financial performance calculated by dividing net income by shareholders' equity, indicating how well a company uses investments to generate earnings growth.
Retained Earnings
The portion of a company's profits that is kept or retained rather than paid out as dividends to shareholders.
- Understand the components and computation of return on equity and return on total assets.
Verified Answer
GD
Learning Objectives
- Understand the components and computation of return on equity and return on total assets.
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