Which formula is used to express the relationship between total equity returned and equity invested?

The formula that expresses the relationship between total equity returned and equity invested is calculated as total equity returned divided by equity invested, yielding the Multiple of Invested Capital (MOIC). This metric is significant in real estate finance and investment analysis as it provides insight into the efficiency and profitability of the equity investment.

When you divide total equity returned by equity invested, you determine how many times the invested capital has been returned to the investor. For example, if an investor puts in $1 million and receives $3 million back, the MOIC would be 3.0, indicating that the investment has returned three times the equity invested. This ratio is vital for understanding the investment's performance relative to the initial equity input.

The other options do not appropriately describe the relationship and thus are incorrect in the context of calculating MOIC. Subtracting equity invested from total equity returned does not yield a relevant financial ratio; adding the two figures does not measure the return on investment effectively; and dividing total equity invested by total equity returned does not represent how efficiently the investment has performed.