The return on the owner's investment (equity) is a better measure of performance than
A) the return on assets ratio.
B) the current ratio.
C) the quick ratio.
D) the absolute dollar amount of income.

Question

Quizplus · Accepted Answer

The return on equity (ROE) measures how effectively a company uses its equity to generate profit, making it a better performance measure than the absolute dollar amount of income, which doesn't account for the size of the investment.

The Return on the Owner's Investment (Equity) Is a Better