Start learning 50% faster. Sign in now
Return on Equity (RoE) = Net Profit / Networth of the company As per accrual accounting, the transactions are recorded in the income statement based on when they occur and not based on the actual cash movement. As such, the net profit is not affected /changed when actual payment is made to the creditors. Thus the RoE remains unaffected by the above transaction. However, a payment to the creditors indicates a decline in the cash and also in the creditors. Thus, the total assets of the company fall. Since Return on Assets (RoA) = Net Profit / total assets of the company, a decline in the total assets will improve the RoA, other things remaining the same.
Which state recently joined the Ayushman Bharat PM-JAY scheme?
Sections 45 & 45A of the Indian Evidence Act have been combined in which section of the Bharatiya Sakshaya Adhiniyam, 2023?
Where was the Global Soil Conference 2024 held, and what was its primary focus?
What is the projected cargo capacity of the Vadhvan Port by 2029?
Who among the following participate in the Government Securities market?
How much subsidy is the Centre providing to IOC, BPCL, and HPCL to offset LPG losses?
What is the estimated cost of the Indo-Russian Vande Bharat sleeper train project, including manufacturing and maintenance?
Which organization has partnered with IIT Madras to develop the Indigenous RISC-V Controller for Space Applications (IRIS)?
Lasoong Festival is celebrated in which Indian state?
When was Unified Payments Interface (UPI) launched?