# The Return on Equity Ratio: Formula, Calculation & Analysis

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

### Given the following snippets from the income statement and balance sheet, what is the return on equity ratio for Company Q?

Start Your Free Trial To Take This Quiz

As a member, you'll also get unlimited access to over 75,000 lessons in math, English, science, history, and more. Plus, get practice tests, quizzes, and personalized coaching to help you succeed.

It only takes a few minutes to set up and you can cancel at any time.

### 2. The return on equity ratio for a given stock is .25. Which of the following BEST describes this value?

Start your free trial to access this entire page
A premium account gives you access to all lesson, practice exams, quizzes & worksheets
Access to all video lessons
Quizzes, practice exams & worksheets
Certificate of Completion
Access to instructors
Create an account to get started

## About This Quiz & Worksheet

We've made it easy to check your comprehension of the formula and analysis of the return on equity ratio with our quiz and worksheet. You'll be asked about some of the best practices for analyzing a return on equity (ROE), what ROE measures and how to calculate it using example data.

## Quiz & Worksheet Goals

Take this quiz to assess your understanding of how to:

• Calculate the return on equity given example data
• Detail best practices for analyzing ROE
• Explain what ROE means in literal terms
• Discuss what return on equity measures
• Describe what it means if the ROE of a stock is greater than 1

## Skills Practiced

• Information recall - access the knowledge you've gained regarding what ROE of greater than 1 means
• Reading comprehension - ensure that you draw the most important information from the related return on equity ratio lesson, like the best way to analyze ROE
• Interpreting information - verify that you can read information regarding what ROE measures and interpret it correctly

## Additional Learning

We've created a lesson called The Return on Equity Ratio: Formula, Calculation & Analysis to assist you if you'd like to learn more about this subject. In addition to covering the questions on this quiz, this lesson is also designed to help you:

• Identify what kind of ratio ROE is classified as
• Define equity and why it's important for an investor to understand
• Describe the equation used to calculate return on equity
Final Exam
Chapter Exam

Support