If two companies have the same return on equity (ROE), they will also have the same return on assets (ROA).

Question

Quizplus · Accepted Answer

Return on equity (ROE) measures a company's profitability in relation to its equity (or shareholders' investment). Return on assets (ROA) measures a company's profitability in relation to its total assets. The two ratios can be different if a company has debt or other liabilities that affect its equity. Therefore, two companies can have the same ROE but different levels of debt, resulting in different ROAs.

If Two Companies Have the Same Return on Equity (ROE)