Return on equity

What is Return on equity?

Return on equity is Net income divided by the average of Total shareholders' equity for the last period. Note: if the Total shareholders’ equity is negative, the ratio will be empty or non-existent.

What does Return on equity (ROE) mean?

This value shows the efficiency of the company’s capital in its operations and expansion. ROEs may vary by industry and show how efficiently a company is using their resources to create additional income. ROEs can be deceiving if a company has recently taken out a lot of debt. It’s important to view ROE alongside other indicators and metrics.