Owner's Equity
Guys I have a doubt in the calculation of Return over Equity?? Should we take into account the Profit and loss ( in this case accumulated loss of 8223 ) for calculating the ratio?? i am not clear as to why or why not we should take it into account.
Share capital I 2,418.83
Share warrants 60.61
Reserve and surplus 2,322.54
Profit & Loss account 8,223.75
(2009 figure 8,838.24)
(on the asset side so loss right???)
Profit after Tax 614
If you have accrued a loss in comprehensive income, and there is no cyclicality in their business, then I would include it. I would exclude the accrual if it was say a retailer in January and they have a ton of returns. Make sure that you cite your assumptions and the convention in your work notes.
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