Eleonore has attended:
Finance for Non-Financial Managers course
PowerPoint Intermediate Advanced course
Excel Intermediate course
Excel Advanced course
Return on investment
do you calculate return on equity on before or after tax profit?
RE: return on investment
Hi Eleonore,
Thank you for your question.
After looking at the slides for the course you attended, the Return on Equity = Profit After Tax / Ordinary Shareholders Funds(Equity).
I believe by looking though a few forums that the following is true:
Return on equity is calculated as net profit (after tax profit) divided by equity. It shows the net performance of the company in relation to the equity invested in the company by the shareholders.
I hope this helps.
Regards
Simon