Concept #1: Ratios: Return on Equity (ROE)

Practice: XYZ Company had net sales during the period of $380,000 and net income of $60,000. If total equity was $480,000 at the beginning of the period and $720,000 at the end of the period, what is the company’s ROE?

Practice: A company has income before taxes of $100,000. Net sales are $400,000 and gross profit is $300,000. What is the ROE, assuming the company has a 40% tax rate, and average common equity was $900,000?

Net income was $450,000. Beginning and ending stockholders' equity was $4,000,000 and $4,800,000, respectively. What was the return on equity (ROE)?
A) 9.4%
B) 10.23%
C) 11.25%
D) 10.41%

Singlewide Sellers has a return on assets (ROA) of 10 percent, a 4 percent profit margin, and a return on equity (ROE) of 20 percent. What is its equity multiplier?
a. 2.00
b. 5.00
c. 40.00
d. 2.50
e. 8.00

Given that Eric's total revenues for 2012 were $7,600 and net income for 2012 was $1,460, what was Eric's return on equity for 2012?
A. 11.812%
B. 37.717%
C. 61.489 %
D. 12.036%