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[SOLVED]This year Andrews achieved an ROE of 19.9%. Suppose next year the profit margin (Net Income/Sales)

This year Andrews achieved an ROE of 19.9%. Suppose next year the profit margin (Net Income/Sales) increases. Assuming sales, assets and financial leverage remain the same next year, what effect would you expect this action to have on Andrews's ROE?

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  •  Andrews ROE will remain the same.
  •  Andrews ROE will increase.
  •  Andrews ROE will decrease.



honeyd


16-03-21 | 13:24:00

An increase in net income means an increase in earnings. for ROE calculation, earning is on numerator hence increase in earning increases ROE.
Best answer us;
Andrews ROE will increase.

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