Economics · Economy
What organizational metric does the Return on Equity (ROE) ratio primarily measure?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The absolute capability of a firm to minimize interest and tax obligations.
- 2The company's capability to generate net profit relative to the capital invested by shareholders.✓
- 3The exact percentage of revenue remaining after accounting for variable production costs.
- 4The operational efficiency of total asset utilization relative to gross revenue.
Correct answer
The company's capability to generate net profit relative to the capital invested by shareholders.
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