To increase her firm's return on equity, Latitia could _____ the amount of _____.

Question

Quizplus · Accepted Answer

To increase return on equity, one way is to increase the leverage of the company by taking on more debt. This can increase the potential return for shareholders but also increases risk. Increasing assets or decreasing liabilities can also affect return on equity, but increasing debt is the most direct way. Decreasing inventory may not necessarily impact return on equity as inventory is an asset that can generate future sales.

To Increase Her Firm's Return on Equity, Latitia Could _____