Answer: c. Total Assets/ Equity
Explanation:
To measure the Return on Equity with 3 ratios, the DuPont Analysis can be used. This is a technique of deconstructing the Return on Equity ratio into various constituent ratios so that their effect on Return on Equity is better know.
The basic DuPont Analysis is;
Return on Equity = [tex]\frac{Net Income}{Revenue} * \frac{Sales}{Total Assets} * \frac{Total Assets}{Equity}[/tex]
Total Assets/ Equity or the Assets to Shareholder Equity ratio is the answer.
