Return on Equity (ROE)

Definition

One of the most important profitability metrics is return on equity (or ROE for short). Return on equity reveals how much profit a company earned in comparison to the total amount of shareholder equity found on the balance sheet. By measuring how much earnings a company can generate from equity, ROE offers a gauge of profit-generating efficiency. ROE helps investors determine if a company is a lean, mean profit machine or an inefficient clunker. Firms that do a good job of milking profit from th

Formula

Tags

efficiency, SLA, Service Level Agreement, cash, profit, capital, investment, balance sheet, equity, debt, earning, income, cost, growth

Metadata

Category: Investment · Added: May 17, 2026