- This topic has 3 replies, 2 voices, and was last updated 3 years ago by .
Viewing 4 posts - 1 through 4 (of 4 total)
Viewing 4 posts - 1 through 4 (of 4 total)
- The topic ‘Return on Equity’ is closed to new replies.
OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Return on Equity
hi
Are reserves included in equity figure to calculate the return on equity or just equity/ordinary shares?
If using book values, then equity is the share capital plus reserves.
If using market values (which is more sensible and more likely) then reserves are not included (the market value effectively already takes into account the reserves, as I explain in my free lectures.)
thank you
You are welcome 🙂