The [[ROE]] (return on equity can be calculated as:
$\LARGE \frac {NI}{S} * \frac{S}{TA} * \frac{TA}{EQ}$

Where:
$\Large TA$ = Total Assets (which is debt + equity)
$\Large EQ$ = Total Equity
$\Large S$ = Sales
$\Large NI$ = Net Income

The ratio $\LARGE \frac{TA}{EQ}$ is called the //''financial leverage''//


bag
mbi_public
created
Fri, 04 Feb 2011 17:03:35 GMT
creator
dirkjan
modified
Fri, 04 Feb 2011 17:03:35 GMT
modifier
dirkjan
creator
dirkjan