Ask Question
16 March, 07:55

In response to complaints about high prices, a grocery chain runs the following advertising campaign: "If you pay your child $6 to go buy $50 worth of groceries, then your child makes twice as much on the trip as we do." You've collected the following information from the grocery chain's financial statements: (millions) Sales $ 586 Net income 32 Total assets 485 Total debt 393 What is the ROE for the store? (In %)

+5
Answers (1)
  1. 16 March, 08:19
    0
    ROE : Net Income / Equity : $32 / $92 = 34,8%

    Explanation:

    To calculate the ROE its necessary to know the Equity of the company which is the difference between the Total Assets and the Total Debt.

    Total Assets : $485

    Total Debt : $393

    Equity : $92

    Net Income : $32

    ROE : Net Income / Equity : $32 / $92 = 34,8%

    The ROE it's a measure that let me know the financial performance of the company, its a good indicator of how efficiently the company it's handling the investor's money.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “In response to complaints about high prices, a grocery chain runs the following advertising campaign: "If you pay your child $6 to go buy ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers