While calculating ROE do we take denominator as opening shareholders fund or closing shareholders fund or their average.
The question says :
Earnings during the year 195
No dividends distributed
Balance sheet totals:
2020
Assets-1580
Liabilities - 600
Paid up capital - 745
Retained earnings - 235
2021
Assets-1920
Liabilities - 745
Paid up capital - 745
Retained earnings - 430
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.
CAclubindia
