whether to calculate ROE, equity shareholders fund will also include equity share premium amount?
As we know ROE=EAE/equity shareholders fund*100
is it correct 👇
equity shareholders fund=
Equity share capital + retention earning + equity share premium
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ROE- equity Share premium
Replies (1)
Technically it should work out as premium account is also classified as capital surpluses and all surpluses are recognised in Equity. If additional information like treasury shares are give, then subtract it from your formula.
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