Return on Equity (ROE)

FreightWaves Customer SuccessRetired Indices

What is it?

Return on equity (ROE) is a measure of financial performance calculated by dividing net income by shareholders’ equity. Because shareholders’ equity is equal to a company’s assets minus its liabilities, ROE could be thought of as the return on net assets.

Who is interested?

The financial community and investors.

What does it tell me?

ROE is considered a measure of how effectively management is using a company’s assets to create profits, the higher the figure the better.