If a Company's Return on Equity Is 25

question 104

True/False

If a company's return on equity is 25.21%, this means that the company earned its stockholders net income of $25.21 per dollar invested.

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Definitions:

Merchandise Inventory

The goods a company holds for the purpose of selling to customers.

Periodic Inventory System

A method of tracking inventory where physical counts are conducted at certain intervals to determine the level of inventory and the cost of goods sold.

Cost of Sale

The direct costs attributed to the production of the goods sold by a company.

Merchandise Inventory

Goods that a company has in stock and available for sale, listed as an asset on the balance sheet.