Return on equity

Industry: 
Abbreviation: 
ROE
Department: 

Return on equity (ROE) measures the rate of return for ownership interest (shareholders' equity) of common stock owners. It measures the efficiency of a firm at generating profits from each unit of shareholder equity, also known as net assets or assets minus liabilities. ROE shows how well a company uses investments to generate earnings growth. ROEs 15-20% are generally considered good.

Expression: 
Profit (loss) / Total equity (average for period) * 100
Net Income / Shareholder Equity
(Net Income / Sales) * (Sales / Total Assets) * (Total Assets / Average Shareholder Equity)
Tags: 
Return, Profit, Equity