A company's return on equity (ROE) that has been increasing over the past three years means the company has generated greater profit for the common share owners.

Question

Quizplus · Accepted Answer

ROE measures a company's profitability by calculating how much profit it generates for each dollar of shareholder equity. An increasing ROE over the past three years indicates that the company has been generating more profit for its common shareholders.

A Company's Return on Equity (ROE) That Has Been Increasing