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Computing Return on Equity

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The Phoenix Company has the following results:
Net Sales $7,000,000
Net Total Assets $5,000,000
Depreciation 200,000
Net Income 500,000
Long-Term Debt 2,500,000
Equity 1,800,000
Dividends 180,000

Compute Phoenix's ROE and confirm this using the three components (ratios) combined in your computation.

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This solution provides calculations in Excel for computing return on equity.

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