What kind of information does the rate of return on ordinary shareholders' equity provide?
A)How much profit a company generates relative to its shareholders' equity
B)How much profit each shareholder makes when he sells his shares
C)How much inventory is returned by customers
D)What proportion of each dollar of sales revenue generates profit

Question

Quizplus · Accepted Answer

The rate of return on ordinary shareholders' equity measures how much profit a company generates relative to its shareholders' equity. It shows how efficiently a company is using its equity to generate profits. It does not provide information on how much profit each individual shareholder makes or how much inventory is returned by customers. Additionally, it does not directly measure the proportion of each dollar of sales revenue that generates profit, although it can provide insights into a company's profitability.

What Kind of Information Does the Rate of Return on Ordinary