Return on Equity (ROE)
Return on Equity (ROE) is a key profitability ratio that measures how effectively a company generates profit from its shareholders' equity. It is calculated by dividing net income by shareholders' equity, providing insight into a company's financial performance. A higher ROE indicates more efficient use of equity capital. ROE helps investors assess a company's ability to generate returns for its shareholders and is an important factor in investment decisions.
How to Calculate ROE
ROE = Net Income / Shareholders' Equity
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