Accounting Dictionary - Letter R

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Return on equity (ROE)
measures how effectively a company employs resources provided by owners (i.e., shareholder’s equity) in generating earnings. In other words, this ratio shows the amount of profit the company earned using shareholder’s equity. This ratio is calculated by dividing net income after taxes by average shareholder’s equity.
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