equity

chandniwadhwani92
Finance Junkie
Posts: 166
Joined: Mon Oct 06, 2014 7:36 am

equity

Postby chandniwadhwani92 » Tue Nov 04, 2014 6:18 pm

EXPLAIN THE CONCEPT OF INCREAING ROE WHEN THERE IS DECREASE IN BOOK VALUE

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

equity

Postby edupristine » Wed Nov 05, 2014 10:25 am

ROE = Net Income / Av. Book Value

So, if the denominator decreases, ROE will increase as ROE is inversely related to Book Value.


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