Which of the following measures a company's profitability?

Return on equity is a key measure of a company's profitability. It evaluates how effectively a company uses its equity to generate profit. Specifically, it expresses the net income as a percentage of shareholder equity, providing a clear indication of the return that shareholders can expect on their investment. A higher return on equity indicates a more efficient company in terms of profit generation relative to its equity base.

In contrast, the current ratio is primarily a liquidity measure, assessing a company's ability to cover its short-term obligations with its short-term assets. The debt to equity ratio focuses on the company's financial structure, indicating the proportion of debt and equity used to finance the company’s assets, but does not measure profitability directly. The interest coverage ratio evaluates a company's ability to meet its interest payments, serving as a measure of solvency rather than profitability.

Thus, return on equity is the most direct metric for assessing how well a company is generating profits concerning the equity invested by shareholders.