ROE
Return on Equity
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 debt, ROE is considered the return on net assets. [1] ROE is considered a measure of the profitability of a corporation in relation to stockholders’ equity. Measure profitability by examining your ability to generate revenue for each unit of shareholder equity. [2] [3] [4] [5] [6]
[1] Retrieved May 21, 2021, from https://www.investopedia.com/terms/r/returnonequity.asp
[2] Klipfolio.com. Retrieved May 21, 2021, from https://www.klipfolio.com/resources/kpi-examples/financial/return-on-equity
[3] Maxwell, A. L., Jeffrey, S. A., & Lévesque, M. (2011). Business angel early stage decision making. Journal of Business Venturing, 26(2), 212–225. https://doi.org/10.1016/j.jbusvent.2009.09.002
[4] Chandler, G.N., and Hanks, S.H. 2002. Measuring the performance of emerging businesses: A validation study. Journal of Business Venturing. https://doi.org/10.1016/0883-9026(93)90021-v
[5] Richard, P.J., Devinney, T.M., Yip, G.S., and Johnson, G. 2009. Measuring Organizational Performance: Towards Methodological Best Practice. Journal of Management. https://doi.org/10.1177/0149206308330560
[6] Wikipedia. Retrieved May 21, 2021, from https://en.wikipedia.org/wiki/Return_on_equity