Multiple Choice
Which of the following statements regarding the return on equity (ROE) measure is not true?
A) ROE is used to measure the profitability of the firm in relation to the amount invested by stockholders.
B) ROE equals net income divided by average total stockholders' equity.
C) ROE is affected by a company's use of leverage.
D) A company's ROE is lower than its return on investment because ROE does not consider that part of the business that is financed by debt.
Correct Answer:
Verified
Correct Answer:
Verified
Q38: Which of the following statements is true?<br>A)Investors
Q39: Solvency ratios are used to assess a
Q40: In vertical analysis,each item is expressed as
Q41: Working capital is current assets minus current
Q42: Earnings before interest and taxes divided by
Q44: Profitability ratios attempt to assess the company's
Q45: Abel Company provided the following information from
Q46: Accrual accounting requires the use of many
Q47: Benson Company declared and paid a cash
Q48: A limitation of financial statement analysis stems