The average accounting rate of return is most similar to which one of the following ratios?

A) Profit margin.
B) Return on assets.
C) Return on equity.
D) Payout ratio.
E) Plowback ratio.

Profit Margin

A financial performance ratio that shows the percentage of profit a company makes for each dollar of revenue.

Return on Assets

A profitability ratio that indicates how efficiently a company is using its assets to generate profit.

Return on Equity

An indicator of a company's financial performance that shows the amount of profit generated per dollar of shareholders' investment.