A company has income before taxes of $100,000. Net sales are $400,000 and gross profit is $300,000. What is the ROE, assuming the company has a 40% tax rate, and average common equity was $900,000?

6.7%

11.1%

33.3%

44.4%

Master Ratios: Return on Equity (ROE) with a bite sized video explanation from Brian Krogol

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