Return on Equity

Ratio analysis is done annually based on annual results. Most of the ratios are for the current year

I hope you got the rest. All the best.

Can u please tell the denominator figurr

You can use both the formula depending on situation
Situations
1. Equity component has remained same during the year. Only change is due to profit and loss
2. Equity component has changed during the year say for eg. due to buyback or fresh issue or right issue

In (1) you should take Opening balance
In (2) you should take Average balance to reflect the change in capital during the year

Coming to your question, observe that ESC in both year is same = 745. Hence we can say that your question falls under situation (1). Therefore my take is that you should take opening balance and not average

What I told you is also there in CFA syllabus.

Hope you understood 😃

Sorry, the picture is not visible.

always calculate closing balances for every formula

if your question suggests a change, then additional capital needs to be calculated

opening equity

+retained earning

-Dividend paid

= closing equity

This question is showing all closing balances eg retained earnings= 195+235=430. No dividends paid.

denominator= 735+430

Is this CA or b.com question?

CA and thankyou