profitability term

Return on Equity

A profitability ratio that shows how much net income a company generates relative to shareholder equity.

Category

profitability

Applies to

Companies, Sectors

Related sectors

3

Linked companies

6

Why it matters

Investor context

ROE helps investors judge capital efficiency, especially in financials and mature businesses that recycle balance-sheet capital.

Formula

Calculation pattern

net income ÷ average shareholder equity

Sector context

Sectors where this term is common

Issuer examples

Companies using this lens

Market context

Markets where this concept shows up

Benchmark context

Indices where the concept matters