Definition
ROE is a financial ratio that measures a company’s ability to generate profit from its shareholders’ equity, calculated by dividing net income by shareholder equity.
Related Services
Financial reporting, investment analysis, and corporate governance services help businesses enhance their ROE by improving profitability and efficient use of equity capital.
Problem and Application
A high ROE reflects effective management and strong profit generation, while a low ROE may signal poor financial performance or an over-leveraged company.
Conclusion
ROE is a valuable measure of shareholder return and company performance, helping businesses attract investment and improve profitability.
