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Thermacorp's 17.3% ROE is an example of a(n) ________ ratio.

A) liquidity
B) profitability
C) activity
D) leverage

User Tworec
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1 Answer

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Final answer:

Thermacorp's 17.3% ROE is an indicator of a profitability ratio, which measures the company's ability to generate profit relative to its equity.

Step-by-step explanation:

Thermacorp's 17.3% ROE (Return on Equity) is an example of a profitability ratio. Profitability ratios are financial metrics used by analysts and investors to evaluate a company's ability to generate income relative to its revenue, balance sheet assets, operating costs, or shareholders' equity during a specific period of time. ROE, specifically, measures how effectively a company's management is using its equity base to generate profits, and it is calculated by dividing net income by shareholder's equity. In this case, a 17.3% ROE indicates that Thermacorp is generating 17.3 cents of profit for every dollar of equity. This is a key metric in assessing how profitable a company is and is often used to compare the financial performance of companies within the same industry.

User Eirikvaa
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