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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?

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cecylya

Answer:

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

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.