The return on ordinary shareholders' equity measures a company's success in reaching the goal of earning net income for its owners.

Question

Quizplus · Accepted Answer

The return on ordinary shareholders' equity (ROE or return on equity) is a financial ratio that measures the net income a company generates for its ordinary shareholders (owners) relative to the amount of equity they have invested in the company. Therefore, it is a measure of the company's success in earning net income for its owners.

The Return on Ordinary Shareholders' Equity Measures a Company's Success