Return on Equity (ROE)

Definition

Return on Equity (ROE) measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

Usage and Context

Return on equity (ROE) indicates the profit a company earns with the money invested by shareholders.

Frequently Asked Questions

What does the return on equity ROE ratio measure?
ROE (Return on Equity) indicates how effectively a company is using its shareholders' money to generate profits.

Which ROE measures a corporation's profitability by revealing how much profit a company generates from?
Return on Equity (ROE) indicates the profit generated from shareholders' equity.

What does ROE stand for?
ROE stands for Return on Equity, a measure of how profitable a company is in relation to shareholders’ equity.

Benefits

Return on equity (ROE) reveals the profit a company generates with shareholder investments.

Conclusion

Return on equity (ROE) shows the profit made from the money shareholders have invested.