The ﬁnancial ratio measured as net income divided by total equity is known as the ﬁrm's:
A) Proﬁt margin.
B) Return on assets.
C) Return on equity.
D) Asset turnover.
E) Earnings before interest and taxes (EBIT).

Question

Quizplus · Accepted Answer

The financial ratio measured as net income divided by total equity is known as the firm's return on equity (ROE). ROE is a measure of the profitability of the company by showing how much profit it generates with the equity it has on hand.

The ﬁNancial Ratio Measured as Net Income Divided by Total