Last Year's Return on Equity Was 30

question 3

Multiple Choice

Last year's return on equity was 30%.This year the ROE has decreased to 20% even though the firm's earnings equaled last year's earnings.The firm has no preferred stock.What caused the decrease?

• A) Equity decreased by 10%.
• B) Equity decreased by 50%.
• C) Equity increased by 10%.
• D) Equity increased by 50%.

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Definitions:

Sales Orders

Sales orders are formal documents issued by a buyer to a seller specifying the products, quantities, and agreed prices for products or services the seller will provide.

Order Getters

Sales personnel whose primary responsibilities involve actively seeking out, engaging, and securing new clients or orders for company products or services.

Product Knowledge

The understanding and information a person has about a product’s features, benefits, and use, which can influence the effectiveness of sales and customer service.

Retailer's Inventories

The range of goods and merchandise that a retailer has on hand and available for sale to customers.