What is return on equity?
A) the ratio of total debt to total assets
B) the rate of interest on an outstanding loan
C) the rate of return that owners earn on their investment
D) the relationship of sales to fixed assets

Question

Quizplus · Accepted Answer

Return on equity (ROE) is a financial ratio that represents the rate of return that owners earn on their investment in the company. It is derived by dividing net income by shareholder's equity. ROE measures how efficiently a company is using equity to generate profits.

What Is Return on Equity