Measures a company’s ability to generate profit from shareholders' equity.
What it Measures ?
How much return we give to our shareholders.
Relevant StakeHolders
Investors, CFO
In-depth Use Case / Real-world Example
ROE is calculated by dividing net income by shareholders' equity. If a company has ₹200,000 in profit and ₹1,000,000 in equity, the ROE is 20%. It measures how well a company uses its equity to generate returns. A higher ROE indicates better management and utilization of shareholder investments.
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