What is 'Return On Equity - ROE'?

Return on equity refers to the profitability returned in direct relation to shareholder investments. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

| 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 (also known as "return on net worth" [RONW]) measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. Breaking it Down: ROE is useful in comparing the profitability of a company to that of other firms in... 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? Learn the difference between ROE and ROC, and how these metrics are calculated and used. 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 (SE) Shareholder's equity (SE) is the owner's claim after subtracting total liabilities from total assets. Read More » Retention Ratio The retention ratio is the proportion of earnings kept back in the business as retained earnings. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2019, Investopedia, LLC, All Rights Reserved | Privacy Policy