Return On Equity ( ROE) Financial leverage and roe ROE=Net prott EBIT-Interest- Taxe q itv Equity (1-Tax rate) (EBIT-Taxes) Equity (1- Tax rate)AxAs中 ql ul =(1-TROA×+D)-1×号] E =(1-TROA+(ROA-1)2]Return On Equity (ROE) ❖ Financial leverage and ROE (1 )[ ( ) ] (1-T)[ROA ] (1-Tax rate) E (E D ) Equity (ROA Assets-Interest rate debt) Equity (1-Tax rate)(EBIT-Taxes) Equity EBIT-Interest-Taxes Equity Net profit E D E D -T ROA ROA i i ROE = + − =  −  = = = = +  