Indicator of profitability Determined by dividing net income for the past 12 months by common stockholder equity (adjusted for stock splits) Result is shown as a percentage Investors use R O E as a measure of how a company is using its money
(Economics) percentage of profits that were obtained from investment in a company's shares over a given period of time (measure the efficiency of the use of funds from shares)
The rate of investment return a company earns on shareholders' equity An indicator of profitability, ROE is determined by dividing net income from the past 12 months by net worth (or book value) This statistic shows how effectively a company is using its investors' money Within a specific industry, it can be used to compare how efficient a company is relative to its competitors Contrast with Return on assets Also, see "Efficiency Ratios " BACK TO TOP
Amount expressed as a percentage, earned on a company's common stock investment for a given period ROE tells shareholders how effectually their money is being employed
Amount earned on a common stock investment in a given period; expressed as a percentage, and plotted over time to express how well stockholders' money is being used
Return on equity measures the return, expressed as a percentage, earned on a company's common stock investment for a specific period It is calculated by common stock equity, or a company's net worth, into net income The calculation is performed after preferred stock dividends and before common stock dividends The figure shows investors how well -- how effectively -- their money is being used by managers
Net income for any chosen period, usually a year, divided by average common stockholder equity for the same period Result is shown as a percentage and is an indicator of profitability
Abbreviated ROE Calculated by dividing a company's annual income by its Book Value (or its earnings per share by book value per share), displayed as a percentage A measure of a company's profitability
Amount, expressed as a percentage, earned on a company's common stock investment for a given period It is calculated by dividing stockholders' equity at the beginning of the accounting period by net income for the period after preferred stock dividends but before common stock dividends Return on equity tells common shareholders how effectively their money is being employed Comparing percentages for current and prior periods reveals trends, and comparison with industry composites reveals how well a company is holding its own against its competitors
Earnings divided by stockholder's equity This indicates how much a company's owners (its stockholders) are making on their investments and is an important measurement of a company's performance
Calculated by dividing net earnings by the average stockholders equity Rate of investment return that is earned by a company on is stockholder's equity
The ratio of a company's annual net income to the equity on its balance sheet ROE is usually measured using the equity on the balance sheet at the end of the prior year, since the current year's income increases the current year's equity, thereby making the percentage return look smaller ROE of about 15% is usually considered the sign of a well-managed company ROE should not be confused with profit margin or return on assets
A measure of how well a company used reinvested earnings to generate additional earnings, equal to a fiscal year's after-tax income (after preferred stock dividends but before common stock dividends) divided by book value, expressed as a percentage