An investor wanting large returns will be interested in companies that have
A) high ROAs.
B) high ROEs.
C) high current ratios.
D) high times interest earned.

Question

Quizplus · Accepted Answer

High ROEs (Return on Equity) indicate that a company is effectively generating profits from its equity, suggesting potentially large returns for investors. ROA (Return on Assets) measures overall efficiency, the current ratio assesses liquidity, and times interest earned evaluates debt management, none of which directly indicate large returns.

An Investor Wanting Large Returns Will Be Interested in Companies