Return on Equity (ROE in %) – The bigger the numerical ratio the better.
This is one of the Equity Ratios which is a measure of profit generated resulting from the efficient use of stockholder funds.
Calculate this ratio using the below equation. Values in the equation can be acquired from the Income Statement and Balance Sheet.
Equation:
ROE = (Net Income) ÷ (Common Equity)
Equation results indicate a company’s rate of return (ROR) for stockholders.