ROE
Return on Equity
Profitability RatiosA measure of how efficiently a company uses shareholders' equity to generate profits. Shows percentage return on shareholder investment.
Formula
ROE = Net Income / Shareholders' Equity
Why it matters
Higher ROE indicates better use of investor capital. Consistently high ROE (>15%) often signals competitive advantage. Watch for high ROE from excessive debt.
Indian example
Related terms
Learn the concept
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