Read the following Case Analysis 1 for Module 2:

Strategic Financial Planning and Analysis

Question 1

Yes I totally agree with the approach of using ROE (Return on Equity) as benchmark for assessing business's financial health. Using ROE has numerous advantages for stakeholders such as shareholders of a company. First of all, it is easy to calculate and majority of shareholders are not qualified for undertaking complex financial calculations for assessing business performance of a company, so an easy ROE calculation is for them. Numbers which are used in ROE calculation comes directly from an organization's financial statements each month. Moreover, stakeholders can ...