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Answer :
The Return on Equity (ROE) is 18.92% in this case. Return on equity (ROE) is a measure of a company's profitability that shows how much profit the company generates with the money that shareholders have invested.
To calculate ROE, you need to know the company's net income, total equity and total assets. In this scenario, Roten Rooters, Inc. equity multiplier of 1.37, total asset turnover of 1.37 and a profit margin of 10.50 percent. Using this information, we can calculate a company's ROE by dividing the company's net income by its total equity.
ROE = Profit Margin x Total Asset Turnover x Equity Multiplier
ROE = 10.50% x 1.37 x 1.37
ROE = 18.92%
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