URGENT: ROE Calc
Calculating ROE for a banking company.... has recently made a net loss (average of past two years is also a negative figure). Shareholder equity is negative for the most recent year (avg for past 2 yrs is also negative).
ROE, based on this, is positive....... i'm assuming it's wrong. is it? what's the right way of doing this?
Many thanks
What? ROE uses equity, not 'net equity'. Perhaps that's your problem
Net loss/equity.. Can't be positive.
If average equity is negative then ROE is a meaningless measure. Better to just "NA" it in whatever you're doing.
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