Howd

boilermaker, JOE and others having trouble with the equation in Schweser…
It is perfectly valid, and can be derived Simple Algebra does it:
ROE=NI/CE
= (EBITInt)*(1T)/CE
= (EBITInt)/CE * (1T)
= (EBITInt)/TA * TA/CE * (1T)
= (EBIT/TA  Int / TA) * TA/CE * (1T)
= [(EBIT/NS * NS /TA)  Int /TA ] * TA/CE * (1T)
= [(Operating Profit Margin * Total Asset Turnover)  Int Coverage] * Fin. Leverage * (1T)
This equation goes on to depict the various components of ROE. How the various things tie in together…
CP