Question

Cal's Market has return on equity (ROE) of 15 percent. What does this mean?

A) Cal's Market generated a 15% profit margin on sales
B) Cal's Market earned a 15% return on its total assets
C) Cal's Market achieved a 15% return for its shareholders' equity
D) Cal's Market incurred a 15% debt to equity ratio

Answer 1

Cal's Market achieved a 15% return for its shareholders' equity.

Step-by-step explanation:

Cal's Market has a return on equity (ROE) of 15 percent. This means that Cal's Market achieved a 15% return for its shareholders' equity. ROE is a financial ratio that measures the profitability of a company by evaluating how effectively it is generating profits from the money invested by its shareholders. In this case, Cal's Market generated a 15% return on the equity invested by its shareholders.