Return on equity

ROE is a profitability ratio that measures how profitable a company is relative to its equity capital. The assets of a company comprise debt and equity. Both types of financing are used to finance the operations of a company. This ratio focuses on the return on the equity component of a company’s financing. It measures the rate of return of shareholders, and thus a firm’s efficiency at generating profits from every unit of shareholder’s equity.

ROE = (Net income) / (shareholder equity)

As with other financial ratios, the ROE of companies varies across industries. Thus it is more relevant to compare the ROEs of companies in the same industry.

Our site and the information it contains is not intended to US citizens, US residents, Canadian citizens or Canadian residents.

I am not a US citizen, US resident, Canadian citizen and/or Canadian resident
I am a US citizen, US resident, Canadian citizen and/or Canadian resident