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1 April, 16:10

The 2011 balance sheet of The Washington Post Company shows average shareholders' equity of $2,726,277, net income of $117,157, and average assets of $2,414,864. The company's return on equity (ROE) for the year is:

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  1. 1 April, 16:15
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    The answer is 4.3 percent.

    Explanation:

    The return on equity is one of the profitability metrics. It evaluates how investors' money is being used efficiently.

    The formula is net income : average shareholders' equity.

    Net income is $117,157

    Average shareholders' equity is

    $2,726,277.

    So we have;

    ($117,157 : $2,726,277) x 100

    4.3 percent.

    This means for everydollar of shareholders' equity, Washington Post Company realized 4.3 percents in profit.
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