Return on equity
A) is the ratio of net profit after taxes to shareholders' equity.
B) is a profitability ratio.
C) is referred to by the acronym ROE.
D) measures the rate of return on the book value of shareholders' total investment in the company.
E) all of the above

Question

Quizplus · Accepted Answer

All of the choices are correct. Return on equity measures the profitability of a company and is calculated as the ratio of net profit after taxes to shareholders' equity. It is commonly referred to by the acronym ROE and measures the rate of return on the book value of shareholders' total investment in the company.

Return on Equity