return on equity (ROE)

Definition

Ratio measuring stockholders' (shareholders') profitability, expressed as a percentage of the firm's net worth. ROE indicates a firm's efficiency in applying common-stockholders' (ordinary-shareholders') money. Formula: Net income ÷ Net worth.

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return on equity (ROE) is...

... in the Accounting & Auditing, Banking, Commerce & Finance and Investing subjects.
... an essential investing term.

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