When will ROE equal ROC

Whenever the firm has no interest payments on debt

Whenever the firm has equal debt and equity financing

Whenever the value of the firms assets exceeds the value of its equity

ROE will never equal ROC

If a company has a healthy current ratio but a significantly lower quick ratio then the assumption is

Inventory represents a large portion of the firms assets

Current liabilities exceed current assets

The cost of goods sold represent more than half the sales

The firm sells only on a cash basis

Efficiency ratios

Are used to measure how well the company uses its assets

Measure profits generated by a firms equity and assets

Include the quick ratio, asset turnover, and return on equity

Are used to measure how liquid the company is