Return on Equity (ROE) :The amount of net income returned as a - TopicsExpress

Return on Equity (ROE) :The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporations profitability by revealing how much profit a company generates with the money shareholders have invested. ROE is expressed as a percentage and calculated as: Return on Equity = Net Income/Shareholders Equity Net income is for the full fiscal year (before dividends paid to common stock holders but after dividends to preferred stock.) Shareholders equity does not include preferred shares. Also known as return on net worth (RONW).