Learn about Return on Equity (ROE), a crucial financial ratio for measuring a company's profitability and how effectively it ...

Return on equity (ROE) measures how well a company generates profits for its owners. It is defined as the business’ net income relative to the value of its shareholders' equity. It reveals the ...

Return on Equity example Return on Equity example. Let's say we want to compute the return on equity of imaginary company Joe's Holiday Warehouse, Inc., which has just reported its Q2 2022 earnings.

Return on equity (ROE) is a financial ratio that compares the net income generated by investors' capital, ... For example, Company A has an ROE of 15% and has a retention ratio of 70%.

Example: Suppose a company's net income is $500,000, and stockholder equity is $2.25 million. return on equity = (500,000 / 2,250,000) × 100 = 22% What You Need to Know.