The return on equity measures the ability of company management to generate earnings from the resources that owners provide.

Question

Quizplus · Accepted Answer

The return on equity (ROE) is a financial ratio that measures the net income a company generates compared to the amount of shareholder equity used to generate it. It is a measure of how well management is using the resources provided by the owners to generate profits. Therefore, statement is true.

The Return on Equity Measures the Ability of Company Management