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.