120k views
2 votes
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:

1 Answer

2 votes

Answer:

The answer is 4.3 percent.

Step-by-step 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.

User Juraj Michalak
by
7.1k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.