10 The Elliott Co reported an ROE of 125 and a ROA of 94 for

10. The Elliott Co. reported an ROE of 12.5% and a ROA of 9.4% for the year. Based on this information, one can conclude that the company: A. was profitable during the year. B. had no debt outstanding during the year. C. distributed 12.5% of its profits as dividends to its investors. D. None of the above.

Solution

ROE is the return on equity generated by a company.

ROA is the return on the assets generated by a company.

So we can say that the company is profitable.

So, the correct answer is A.