The amount of profit a firm earns for every $1 of equity is referred to as the:
A)profit margin
B)equity multiplier
C)return on equity
D)capital intensity ratio
E)price-earnings ratio

Question

Quizplus · Accepted Answer

Return on equity (ROE) is the measure of how much profit a company earns compared to the amount of equity in the company. It is calculated by dividing net income by shareholder equity. ROE is expressed as a percentage and is a useful metric for comparing the profitability of different companies.

The Amount of Profit a Firm Earns for Every $1