Question

Return on Equity: Better or Worse? Last year Elena was told that Awesome Sauces' Return on Equity was 12.4% and this year it's 20.8%. From the point of view of a passive investor, is this year's Return on Equity better or worse than last year's?

Answer 1

From the point of view of a passive investor, is this year's Return on Equity better than last year's

Step-by-step explanation:

Return on Equity is a simple metric for evaluating returns, measures the rate of return that the owners of common stock of a company receive on their shareholdings.

So, this year, Elena will receive more on her shareholdings, we can say that this year's Return on Equity is better than last year's.