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Memphic Memphic
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6 years ago
Calculate Luther's return of equity (ROE), return of assets (ROA), and price-to-earnings ratio (P/E) for the year ending December 31, 2008.
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
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#1
6 years ago
ROE = NI/shareholder equity = 10.2/63.6 = .160 or 16.0%
ROA = NI/total assets
Here total assets are not given, but we know that Total Assets = Total Liabilities + Shareholder Equity, so ROA = 10.2/386.7 = .026 or 2.6%
P/E = price/EPS or Market Cap/NI = (8.0 × $15)/$10.2 = 11.8
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