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Return on Equity (ROE) Finance Problem

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Decompose the return on equity for the FY ending on January 31st, 2004 in its five components below:

ROE = EAT/EBT X EBT/EBIT X EBIT/SALES X SALES/INV.CAP. X INV.CAP/SH.EQUITY

Please show ALL work

Use these links:

http://finance.yahoo.com/q/is?s=SPLS&annual
http://finance.yahoo.com/q/bs?s=SPLS&annual
http://finance.yahoo.com/q/ks?s=SPLS

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Solution Summary

This solution calculates return on equity.

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ROE = EAT/EBT X EBT/EBIT X EBIT/SALES X SALES/INV.CAP. X INV.CAP/SH.EQUITY

EAT = Net Income = 490,211
EBT = Income Before Tax = 778112
EBIT = 798,288 ...

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