Return on equity
A) is used by management to evaluate liquidity.
B) calculates the rate of return shareholders are earning on their investment.
C) represents the equity a common shareholder has in net assets of the corporation.
D) is calculated by taking profit divided by this year's shareholders' equity.

Question

Quizplus · Accepted Answer

Return on equity (ROE) measures the profitability of a company in generating profits from shareholders' equity, indicating the rate of return shareholders are earning on their investment.

Return on Equity