Friday, August 31, 2018

What is 'Return On Equity - ROE'?

The profitability returned in direct relation to shareholders' investments is called the return on equity.
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Return On Equity - ROE
Return on equity (ROE) is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.
Breaking it Down:
The ROE is useful for comparing the profitability of a company to that of other firms in the same.... Read More
Related to "Return On Equity - ROE"
How To Calculate Return On Equity (ROE)?
Return on Equity (ROE) measures how efficiently a company's executives are generating income from the equity investments of its shareholders. Read More
Decoding DuPont Analysis
Get a deeper understanding of ROE with these three-step and five-step calculations. Read More
What is the difference between return on equity and return on capital?
Return on equity (ROE) and return on capital (ROC) measure very similar concepts, but with a slight difference in the underlying formulas. Read More
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Related Definitions
Operational Efficiency
Operational efficiency is primarily a metric that measures the efficiency of profit earned as a function of operational costs. Read More
Asset Turnover Ratio
Asset turnover ratio measures the value of a company's sales or revenues generated relative to the value of its assets. Read More
Shareholders' Equity
A firm's total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Read More
Retention Ratio
The retention ratio is the proportion of earnings kept back in the business as retained earnings. Read More
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