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  1. Jan 26, 2024 · Return on equity (ROE) is the measure of a company's net income divided by its shareholders' equity. ROE is a gauge of a corporation's profitability and how efficiently it generates those...

  2. ROE = Net Income / Shareholders’ Equity. ROE provides a simple metric for evaluating investment returns. By comparing a company’s ROE to the industry’s average, something may be pinpointed about the company’s competitive advantage. ROE may also provide insight into how the company management is using financing from equity to grow the business.

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