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29 April, 13:13

Digby has a roe of 0.24 (roe = net income/equity). that means:

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  1. 29 April, 13:40
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    each dollar that is invested by the shareholders

    Explanation:

    The formula to compute the return on equity is shown below:

    Return on equity = (Net income) : (total equity)

    It shows a relationship between the net income and the total equity so that the correct percentage can be computed.

    It also shows the profitability of the company which reflects each dollar that is invested by the shareholders
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