RETURN ON EQUITY Definition

Bookmark and Share

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

Learn new Accounting Terms

ASSESSMENT is a. proportionate share of a shared expense; or, b. amount of tax or other levied special payment due to a governmental municipality or association.

WON is a currency of North Korea and South Korea.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.