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

Return on Equity (ROE) is calculated by dividing net income by shareholder equity, thus measuring the profitability relative to the shareholders' equity.

The Financial Ratio Measured as Net Income Divided by Total