What is 'Return On Equity - ROE'?

The profitability returned in direct relation to shareholders' investments is called the return on equity.

Sharper Insight. Smarter Investing. Manage Preferences TERM OF THE DAY 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 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 You are currently subscribed as: mondemand.forex@blogger.com Unsubscribe  |  Manage Subscriptions Investopedia, LLC, A Division of IAC. 114 West 41st St, floor 8, New York NY 10036 Copyright © 2018, Investopedia, LLC. All Rights Reserved Follow Us: