Definition
ROE shows how effectively a company turns equity into profit. High ROE can reflect a strong business, but heavy debt can also inflate it.
Formula
ROE = net income / average shareholders' equity
Academy › Glossary › Fundamentals
ROE (Return on equity)
Profit as a percentage of the money shareholders have invested.
Learn it in context with PDB Academy
Guides, short videos and a plain-English glossary in one place, with tools to try each idea on real market data. The basics are free.
Create a free accountOpen PDB Academy