Which of the following is a good measure of return on owners' equity? (A) Gearing (B) Liquidity (C) Profitability (D) Solvency - HSC - SSCE Business Studies - Question 15 - 2001 - Paper 1

Profitability is a key measure of return on owners' equity. It indicates how effectively a company is generating profit relative to the equity that shareholders have invested. When assessing profitability, metrics such as Return on Equity (ROE) can be used, which is calculated using the formula:
$ROE = \frac{Net \ Income}{Shareholders' \ Equity} \times 100 \%$
This measure provides insights into the financial performance of a company and how well it is utilizing its equity base to generate earnings.