Chapter 11
Financial Statement Analysis
541
AS-8 (
4
)
What is the formula for return on equity?
AS-9 (
4
)
For a particular company, if net income increased significantly from one year to the next, does
this guarantee that the return on equity will also increase? Explain.
AS-10 (
4
)
What is the formula for return on assets?
AS-11 (
4
)
What are some possible reasons why return on assets may have decreased from one period to
the next?
