Shareholder Equity or just Common Stock? Hey guys, so I lost my financial management book but i do have my notes. now correct me if im wrong, but my notes says the formula for return on equity is:
ROE = Operating Income (EBIT) / Common Stock
is this right?
because im calculating the ROE for Komatsu : http://finance.yahoo.com/q/bs?s=KMTUY.PK&annual
and if i use the formula above i would get:
$786,000/$726,000 = 108%!!!
im reading up on google and each website says different things so im confused!
do i use net income instead and total shareholders equity?
thanks guys!![]()
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