Question
Is Return on Equity the same as Return on Sale. I don't understand their differences.
Answers
bobpursley
No. If you buy a 100,000 investment on borrowed money, say 50,000 down, the rest borrowed, and the first year the investment is worth 115,000.
your return on sale is 15,000 or 15percent
your return on equity is 15,000 or 30 percent (less interest costs, of course).
your return on sale is 15,000 or 15percent
your return on equity is 15,000 or 30 percent (less interest costs, of course).