Return On Equity |
| The profit of a company divided by its equity, sometimes known as book value. For instance, if the adjusted profit of a company is 1m and equity is 10m, the ROE is 10%. It is a benchmark that is popular with banks and other institutions whose book value is a fair reflection of the capital base, and where it is not misleading to ignore the role of debt financing in increasing returns but with significantly more risk. Similar to return on net assets (RONA). |
|
|