- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 12. Introduction to Financial Statement Modeling
- Subject 1. Building a Financial Statement Model
CFA Practice Question
According to the authors, which ratio is the best measure of profitability?
B. Return on equity.
C. Return on assets.
A. Return on invested capital.
B. Return on equity.
C. Return on assets.
Correct Answer: A
The numerator of ROIC is pre-interest earnings. It is not affected by a company's degree of financial leverage.
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