Rate of return on equity, a profitability ratio, measures the rate of return on investment.
The ratio equals profit minus any preference dividends) divided by average ordinary equity.

The TIE ratio is a leverage ratio_ It emphasizes the ability to pay interest expense. The ratio equals profit before interest and taxes divided by interest

C:\Documents and Settings\usernwz1\Desktop\1.PNG RST Corporation's Income Statement for Year 5 and Year 6


The market value of RST's ordinary stock at the end of Year 6 was US $100.00 per share.

A limit, reasonableness, or range test determines whether an amount is within a predetermined limit for given information. It can only detect certain errors i.e., those that exceed the acceptable limit).