QuestionAugust 3, 2025

Multiple Cholce Question Return on equity is net income minus takes divided by __ common stock outstanding total owners' equity current liabilities net sales

Multiple Cholce Question Return on equity is net income minus takes divided by __ common stock outstanding total owners' equity current liabilities net sales
Multiple Cholce Question
Return on equity is net income minus takes divided by __
common stock outstanding
total owners' equity
current liabilities
net sales

Solution
4.5(314 votes)

Answer

total owners' equity Explanation 1. Identify the formula for Return on Equity Return on Equity (ROE) is calculated using the formula: **ROE = \frac{\text{Net Income}}{\text{Total Owners' Equity}}**. 2. Determine the correct denominator The denominator in the ROE formula is Total Owners' Equity, not common stock outstanding, current liabilities, or net sales.

Explanation

1. Identify the formula for Return on Equity<br /> Return on Equity (ROE) is calculated using the formula: **ROE = \frac{\text{Net Income}}{\text{Total Owners' Equity}}**.<br /><br />2. Determine the correct denominator<br /> The denominator in the ROE formula is Total Owners' Equity, not common stock outstanding, current liabilities, or net sales.
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