Return on Equity Is Driven by (1)the Spread Between the Operating

question 148

True/False

Return on equity is driven by (1)the spread between the operating return on assets and the interest rate,and (2)changes in the debt ratio.

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Definitions:

IAS 34

refers to the International Accounting Standard 34 "Interim Financial Reporting" that outlines how to report financial figures for interim periods.

Provision

A liability of uncertain timing or amount, recognized when an entity has a legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation.

Discreet Approach

A method or strategy that is conducted with subtlety and reserve, often to avoid attracting undue attention or to handle sensitive matters.

Integral Approach

An accounting method that combines the financial statements of a parent company and its subsidiaries into one comprehensive set of statements.