ObjectiveMcq
Print Protected
This page is protected for print. Use the website to view the content.
Return on Equity (ROE) is calculated as:
Correct Answer: B — Net Profit / Shareholders' Equity
The correct answer is B: Net Profit / Shareholders' Equity.
ROE measures how effectively management is using shareholders' equity to generate profit. A higher ROE indicates more efficient use of equity capital. It is one of the most important profitability ratios used by investors to assess a company's financial performance.