Return on equity: Difference between revisions

Revision as of 14:13, 25 June 2016

(ROE).

A measure of how much profit is enjoyed (or expected to be enjoyed) by equity investors, compared to the book value of the equity investment made.

Profit is measured as profit after tax.

ROE is calculated as:

Profit after tax / (book value of equity)

@@ Line 1: / Line 1: @@
 (ROE).
-A measure of how much return is received (or expected to be received) by equity investors, compared to the equity investment made.
+A measure of how much profit is enjoyed (or expected to be enjoyed) by equity investors, compared to the book value of the equity investment made.
-Return is generally measured after all expenses, including taxation.
+Profit is measured as profit after tax.
+ROE is calculated as:
+Profit after tax / (book value of equity)
 == See also ==
+* [[Book value]]
 * [[Equity]]
+* [[Profit after tax]]
 * [[Return on capital employed]]
 * [[Return on investment]]
 [[Category:Corporate_finance]]