Return on equity

(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)

See also

• Book value
• Equity
• Profit after tax
• Return on assets
• Return on capital employed
• Return on investment
• Return on shareholders funds