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    • Question

      Which of the following ratios measures a company's

      profitability?
      A Debt-to-equity ratio Correct Answer Incorrect Answer
      B Current ratio Correct Answer Incorrect Answer
      C Return on equity Correct Answer Incorrect Answer
      D Gross margin ratio Correct Answer Incorrect Answer

      Solution

      Return on equity (ROE) is a financial ratio used in accounting to measure a company's profitability relative to the amount of equity invested by shareholders. It is calculated by dividing a company's net income by its shareholder's equity.

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