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The ratio shows how much income was earned for every dollar invested by owners. Th ratio...

The ratio shows how much income was earned for every dollar invested by owners. Th ratio is ?
A. Roa
b. Roe
C. Gross margin
D none of the above
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Answer #1

b.ROE (Return On Equity) is correct answer.

ROE = NET INCOME/EQUITY

owners of a company are equity shareholders,so amount which the owners invested is equity of company.So ROE shows how much income was earned per equity(i.e.,amount which was invested by owners).

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