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Financial decision making for managers session 3 DQ

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Q 1. Analyze ROA and ROE and how each one fits into Profitability Ratios.

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It is important to understand the two variables namely ROA (Return on assets) and ROE (Return on Equity) in order for knowing and understanding a company. These variables happen to be the two most significant measures for assessing how capital entrusted by the shareholder is being managed by the management team of the company in an effective manner. Therefore, Return on Equity is Return on Asset when financial leverage