return on equity


return on equity
return on equity ( ROE)
A measure of the return realized by the owners of an enterprise. Calculated by dividing an enterprise's annualized net income by its average capital for the period. Alternatively, it can be calculated by multiplying the enterprise's ROA by its leverage/equity multiplier. ROE indicates how effectively the enterprise is using its capital to produce income. American Banker Glossary
————
( ROE)
Indicator of profitability. Determined by dividing net income for the past 12 months by common stockholder equity (adjusted for stock splits). Result is shown as a percentage. investors use ROE as a measure of how a company is using its money. ROE may be decomposed into return on assets ( ROA) multiplied by financial leverage ( total assets/total equity). Bloomberg Financial Dictionary

* * *

return on equity reˌturn on ˈequity abbreviation ROE noun [singular, uncountable] FINANCE ACCOUNTING
a company's profit in a particular period of time in relation to its share capital (= money from shareholders):

• He sets his standards high, seeking a 20% return on equity for firms he invests in.

— compare equity yield yield1

* * *

   ► See ROA, ROE.

* * *

return on equity UK US noun [U] (ABBREVIATION ROE)
FINANCE, ACCOUNTING a company's profit for a particular period compared with the amount of share capital (= money invested by shareholders) in it. This shows how effectively the company is using its share capital to make a profit: »

One way to increase return on equity is to cut the amount of capital supporting the business.


Financial and business terms. 2012.

Look at other dictionaries:

  • Return on equity — (ROE) measures the rate of return on the ownership interest (shareholders equity) of the common stock owners. It measures a firm s efficiency at generating profits from every unit of shareholders equity (also known as net assets or assets minus… …   Wikipedia

  • Return on equity — Le Return on Equity (ou ROE) qui peut être traduit en français par taux de “retour sur capitaux propres” ou taux de rendement des capitaux propres ou encore rentabilité des capitaux propres est une notion économique d inspiration anglo saxonne.… …   Wikipédia en Français

  • return on equity — The relationship of the amount of annual earnings available after all expenses are paid to the total value of all the common shareholders investment. Return on equity is calculated by dividing common stock equity (net worth as shown on the books… …   Black's law dictionary

  • Return on Equity — Le Return on Equity (ou ROE) qui peut être traduit en français par taux de “retour sur capitaux propres” ou taux de rendement des capitaux propres ou encore rentabilité des capitaux propres est une notion économique d inspiration anglo saxonne.… …   Wikipédia en Français

  • Return on Equity — Die Eigenkapitalrentabilität (EKR) oder Eigenkapitalrendite (engl: Return on Equity bzw. ROE) ist eine betriebswirtschaftliche Kennzahl und Steuerungsgröße. Sie dokumentiert, wie hoch sich das vom Kapitalgeber investierte Kapital innerhalb einer… …   Deutsch Wikipedia

  • return on equity — Accounting. the amount of profit computed by dividing net income before taxes less preferred dividends by the value of stockholders equity, usually expressed as a percentage. Abbr.: ROE * * * …   Universalium

  • return on equity — ROE The net income of an organization expressed as a percentage of its equity capital …   Accounting dictionary

  • return on equity — ROE The net income of an organization expressed as a percentage of its equity capital …   Big dictionary of business and management

  • return on equity — noun Finance a measure of the profit generated by the funds contributed by the shareholders in an enterprise, expressed as a percentage and calculated as net income from the shareholding divided by the amount of shareholder s equity …   Australian English dictionary

  • return on equity — Accounting. the amount of profit computed by dividing net income before taxes less preferred dividends by the value of stockholders equity, usually expressed as a percentage. Abbr.: ROE …   Useful english dictionary