Return on Equity Is Calculated As

question 35

Multiple Choice

Return on equity is calculated as:

• A)Net income divided by average stockholders' equity.
• B)Net income divided by ending stockholders' equity.
• C)Net income divided by average market value of equity.
• D)Net income divided by ending market value of equity.

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Definitions:

Accounts Receivable

Unpaid customer dues to an enterprise for availed services or acquired goods.

Indirect Method

A technique used in cash flow statements to adjust net income for non-cash transactions and changes in working capital.

Income Statement

A financial report showing a company's revenues, expenses, and profit over a specific period.

Cash Dividends

Payments made by a corporation to its shareholders out of the company's profits.