Question: Analysts and investors often use return on equity ( ROE ) to compare profitability of a company with other firms in the industry. ROE is

Analysts and investors often use return on equity (ROE) to compare profitability of a company with other firms in the industry. ROE is considered a very important measure, and managers strive to make the companys ROE numbers look good.
An increase in ROE would imply an increase in shareholder wealth.

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