Which one of the following is NOT an advantage of using ROE as a goal?
A) ROE is highly correlated with shareholder wealth maximisation.
B) ROE and the DuPont analysis allow management to break down the performance and identify areas of strengths and weaknesses.
C) ROE does not consider risk.
D) All of the above are advantages of using ROE as a goal.

Question

Quizplus · Accepted Answer

While ROE is a useful metric for measuring a company's profitability, it does not take into account the level of risk involved in achieving that profitability. As a result, it is not a complete measure of the company's performance or success.

Which One of the Following Is NOT an Advantage of Using