The profitability generated by the net assets (assets-liability)of a corporation would be best measured by the:
A)Quick Ratio
B)Return on Investment
C)Return on Owners' Equity
D)Gross Margin Ratio

Question

Quizplus · Accepted Answer

Return on owners' equity measures the profitability generated by the net assets of a corporation. It is calculated by dividing the net income available for common shareholders by the average common shareholder's equity. The other options (Quick Ratio, Return on Investment, Gross Margin Ratio) do not specifically measure profitability generated by net assets.

The Profitability Generated by the Net Assets (Assets-Liability)of a Corporation