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What does ROE measure?

  1. A Net income as a percentage of shareholders' equity
  2. B Revenue growth year on year
  3. C Total assets divided by equity
  4. D Operating profit as a percentage of sales
Answer

Net income as a percentage of shareholders' equity

Return on equity shows how efficiently shareholder funds generate profit. DuPont analysis breaks it into margin, asset turnover and leverage.

All Finance MCQs

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