RETURN ON EQUITY (ROE) measures the overall efficiency of the firm in managing its total investments in assets and in generating a return to stockholders. It is the primary measure of how well management is running the company. ROE allows you to quickly gauge whether a company is a value creator or a cash consumer. By relating the earnings generated to the shareholders equity, you can see how much cash is created from the existing assets. Clearly, all things being equal, the higher a companys ROE, the better the company. Formula: Net Income / Stockholders Equity
BOOT is money received during an exchange to equalize values, e.g. if a person sells his business for an assumption of liabilities and for some cash the cash is boot.
PAID IN SURPLUS see PAID-IN-CAPITAL.
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