Answered: What does ROE measure?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 4Q: What is the screening decision?

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What does ROE measure?

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I. Meaning

Profitability ratio is referred as the financial metrics which is used by analysts as well as investors to estimate company’s ability to earn profit, revenue, operating costs and shareholder’s equity for a specific period. It indicates company’s efficiency in utilizing assets to produce profit and shareholders value.

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