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Some of Intel's financial statement data includes:

2015 2016

Total assets 105,000 125,000

Net income 10,000 11,000

Sales 95,000 100,000

Equity 30,000 32,000

Compute Intel's return on equity (ROE) for 2016.

Respuesta :

Shahzaibfaraz

Answer:

ROE 2016 = 34.375%

Explanation:

ROE or return on equity is a measure of the profitability of the business. It is calculated as a relation of profitability to the equity.

The Dupont equation is an expanded version of calculating the ROE. It is calculated using the Net Profit Margin, the Total assets turnover and the equity multiplier.

The formula for calculating ROE under this method,

ROE = Net Income / Sales  *  Sales / Total Assets  *  Total Assets / Equity

ROE (2016) = 11000 / 100000  *  100000 / 125000  *  125000 / 32000

ROE (2016) = 0.34375 or 34.375%

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