From the standpoint of the stockholders of a company,the ratio that measures the overall performance of a company would be calculated using which of the following?
A) Average total assets and net income
B) Average stockholders' equity and net sales
C) Average stockholders' equity and net income
D) Net sales and average total assets

Question

Quizplus · Accepted Answer

The ratio that measures the overall performance of a company as viewed by the stockholders is the return on equity (ROE). This ratio is calculated by dividing net income by average stockholders' equity. Therefore, choice C, which uses average stockholders' equity and net income, is the best option.

From the Standpoint of the Stockholders of a Company,the Ratio