An owner of an archery shooting gallery calculates he has invested $450,000 into the business.He wants to determine if his investment has been worthwhile.What financial ratio should he review?
A) total asset turnover
B) return on equity
C) operating profit margin
D) financial leverage

Question

Quizplus · Accepted Answer

The owner should review the return on equity (ROE) ratio to determine if his investment has been worthwhile. ROE calculates the amount of profit generated for each dollar of the owner's equity invested in the business. A higher ROE indicates that the owner's investment has been more profitable.

An Owner of an Archery Shooting Gallery Calculates He Has