If shareholders want to know how much profit a firm they are making on their entire investment in the firm,the shareholders should look at the:
A)profit margin.
B)return on assets.
C)return on equity.
D)equity multiplier.
E)earnings per share.

Question

Quizplus · Accepted Answer

Return on equity (ROE) measures the amount of profit a firm generates on the investment made by the shareholders. It is calculated by dividing net income by shareholder equity. ROE is one of the most widely used performance metrics for companies and indicates how efficient a company is at using its resources to generate profits. Therefore, shareholders can determine how much profit they are making on their entire investment in the firm by looking at the return on equity.

If Shareholders Want to Know How Much Profit a Firm