The denominator of a return ratio will be some measure of the company's income for the period.

Question

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The denominator of a return ratio is typically a measure of the company's investment, equity, or assets, not its income. Return ratios, such as return on investment (ROI), return on equity (ROE), or return on assets (ROA), compare the income or profit generated to the resources (investments, equity, or assets) used to generate that income.

The Denominator of a Return Ratio Will Be Some Measure