Question

ROE is computed as: A. Net income attributable to controlling interest / Average equity attributable to controlling interest B. Net income attributable to controlling interest / Net sales C. [RNOA + (FLEV × Spread)] x NCI ratio D. A and B E. A and C

Answer 1

Answer:

The correct answer is E

Explanation:

ROE termed as or stand as Return on Equity, which is described as the  profitability ratio that evaluates the firm ability for generating the profits from its shareholders investment in the company or firm.

The formula to represent ROE is value of Net Income attributable to the equity shareholders.

ROE = Net Income agter Taxes / Shareholders Equity

And there is one more formula which is a disaggregation of ROE into the non- operating as well as operating components, which is as:

ROE = [ROE +(FLEV × Spread)] x NCI

Therefore, option A and C are correct.