HomeDefinitionsCompareDebt Return on equity (ROE)The financial definition for Return on equity (ROE):Indicator of profitability. Determined by dividing net income for the past 12 months by common stockholder equity (adjusted for stock splits). Result is shown as a percentage. Investors use ROE as a measure of how a company is using its money. ROE may be decomposed into return on assets (ROA) multiplied by financial leverage (total assets/total equity). Similar MatchesAfter tax real rate of returnAfter tax real rate of returnThe after-tax rate of return minus the inflation rate. Annual rate of returnAnnual rate of returnThere are many ways of calculating the annual rate of return. If the rate of return is calculated on a monthly basis, we sometimes multiply this by 12 to express an annual rate of return. This is often called the annual percentage rate (APR). The annual percentage yield (APY), includes the effect of compounding interest. Annualized holding period returnAnnualized holding period returnThe annual rate of return that when compounded t times generates the same t-period holding return as actually occurred from period 1 to period t. Further SuggestionsArithmetic average (mean) rate of returnAverage accounting return Average rate of return (ARR) Cash on cash return Certainty Equivalent Return Compound Annual Return Consolidated tax return Click to compare definitions of Return on equity (ROE) Click to view definitions beginning re |