The profitability ratio that measures the return that shareholders earned on the equity they invested in the firm is the:

Question

Quizplus · Accepted Answer

Return on equity measures the return that shareholders earned on the equity they invested in the firm. It is calculated by dividing net income by shareholders' equity. Operating profit margin measures the profitability of the company's core business operations, while net profit margin measures the proportion of sales that is left over after all expenses have been paid. Return on assets measures the return that the company earned on its total assets, regardless of how those assets were financed.

The Profitability Ratio That Measures the Return That Shareholders Earned