In analysing shares as investments, return on equity is calculated to show the return the company has made for shareholders on their investment. Shareholders' equity normally excludes intangible assets such as goodwill and is calculated by deducting total liabilities and intangibles from total assets. Return on equity = (After-tax profits / Shareholders' equity) x100 = %.
The Bank's net income for a given period expressed as an annualized rate of return on the Bank's total capital. Calculated as earnings for a period (e.g., a quarter or a year) divided by the average balance of total capital outstanding during the period, and adjusted to an annualized rate.
Basically a code used to define the earning capacity of a company or credit institution, which presents the result (annual surplus) in relation to the equity invested. In this case, the annual (pre-tax) surplus as a percentage of the average annual equity invested - excluding the shares of partners outside the group.
The net income divided by the equity of a company. The net income of an organization expressed as a percentage of its equity capital. A high ROE suggests the owners' money was invested profitability. ROE = Net Profit / Owners Equity
A measure of profitability expressed as a percentage derived by dividing net earnings by common stockholders' equity. To determine how a company is faring among its competition, compare its ROE to its industry's ROE.
A measure of the return realized by the owners of an enterprise. Calculated by dividing an enterprise's annualized net income by its average capital for the period. Alternatively, it can be calculated by multiplying the enterprise's ROA by its leverage/equity multiplier. ROE indicates how effectively the enterprise is using its capital to produce income.
(ROE) - The ratio of a company's annual net income to the equity on its balance sheet. ROE is usually measured using the equity on the balance sheet at the end of the prior year, since the current year's income increases the current year's equity, thereby making the percentage return look smaller. ROE of about 15% is usually considered the sign of a well-managed company. ROE should not be confused with profit margin or return on assets.
Return on equity, another indicator of profiability and also one of the most widely used tools in deciding how a company is doing, is calculated by taking the net income for the past 12 month period and dividing it by the common stock equity.
Calculated by dividing net profit after tax and outside equity interests by shareholders funds attributable to shareholders. It is an indicator of the rate of return achieved by the company based on the equity funds it has.
is the ratio of Net Income divided by the Book Value of Shareholders Equity. ROE is a commonly used measure at the corporate level. (ROI is commonly used at the business unit or divisional level. ROI and ROE are both subject to accounting conventions and distortions. Discounted Cash Flow measurement is often used to overcome accounting distortions because it is an economic measure.)
Return on equity measures how much a company earns within a specific period in relation to the amount that's invested in its share capital. It is calculated by dividing the company's net income by the company's net worth. In general, it's considered a sign of good management when a company's performance over time is at least as good as the average return on equity for other companies in the same industry.
Fundamental ratio showing the relationship between the results of operations of an enterprise (net income for the period) and the capital employed. (Net income as a percentage of average capital employed over the period)
A figure t measures the percentage a company earns on the money invested in it. The figure shows investors how effectively a company's managers invest its assets. eturn on Investments - The money you earn or lose on your investment, expressed as a percentage of your original investment.
A profitability ratio. Measures the after tax return on equity capital. This is an indication of management's performance. The value is computed by dividing net income available to common stockholders by total equity at beginning of year.
Calculated as net income, less preferred dividends, as a percentage of average common shareholdersâ€™ equity. Common shareholdersâ€™ equity is comprised of common share capital, contributed surplus, net unrealized foreign exchange gain (loss) and retained earnings.
The net income divided by averaged common equity. Common equity is averaged over the accounting year. It may be adjusted to include goodwill written-off and is attributed across different share classes, where common stock is comprised of more than one share type. ROE is expressed as a percentage and is not calculated when average common equity is negative.
Return on equity measures the return, expressed as a percentage, earned on a company's common stock investment for a specific period. It is calculated by common stock equity, or a company's net worth, into net income. The calculation is performed after preferred stock dividends and before common stock dividends. The figure shows investors how well -- how effectively -- their money is being used by managers.
This is the most popular indicator of financial performance. It basically measures the companyâ€™s efficiency in earning profits on behalf of its shareholders. Basically, the return on equity is found by dividing pre-tax profit by shareholders funds. More precisely: ROE = (profits after interest and preference dividend but before tax) divided by (average shareholders funds plus any reserves and retained profits). This is a book ratio which in some ways is like the â€˜Earnings per Shareâ€™ market ratio. Instead of dividing profit between the number of shares in the marketplace, it divides it by the capital sum which equity financing has actually raised for the company. Shareholders funds are the book value of the amount shareholders own â€“ a companyâ€™s total assets minus total liabilities. As the ratio indicates how much profit is generated from assets, the higher the figure the better.
A ratio calculated by dividing common stock equity (net worth) at the beginning of the accounting period into net income for the period after preferred stock dividends, but before common stock dividends. ROE tells common stockholders how effect their money is being employed.
This value is the Income Available to Common Stockholders for the trailing twelve months divided by the Common Equity and is expressed as a percentage. Average Common Equity is calculated by adding the Common Equity for year end plus year ago period divided by 2.
A financial ratio that measures of a firm's return on shareholder investment, equal to a fiscal year's after-tax income (after preferred stock dividends but before common stock dividends) divided by book value, expressed as a percentage.
Net operating gain as a percentage of prior year capital and surplus. This profitability test reflects the return on capital and surplus from insurance operations and investments and has been traditionally used with stock companies to indicate return on stockholder's investment. Comparisons cannot be made between stock and mutual companies since the net operating gain is after dividends are paid to policyowners.
(Financial ratio analysis based) A financial analysis tool measuring performance of equity. ROE is a common measure of profitability related to the amount of invested equity and is typically derived by (a) dividing net income to average owner's equity or (b) dividing net income available to common stockholder's by average common equity.
Return on equity is a measure of how much in earnings a company generates in four quarters compared to its shareholders' equity. It is measured as a percentage. For instance, if XYZ Ltd made Lm1 million in the past year and has shareholders' equity of Lm10 million, then the ROE is 10%.
The rate of investment return a company earns on shareholders' equity. An indicator of profitability, ROE is determined by dividing net income from the past 12 months by shareholders' equity. This statistic shows how effectively a company is using its investors' money. Contrast with ROA.
Indicator of profitability. Determined by dividing Net income for the past 12 months by common stockholder Equity. Result is shown as a percentage. Investors use ROE as a measure of how a Company is using its money.
The profits distributed to common shareholders after all expenses, interest costs and preferred stock dividends have been paid. In ratemaking, it represents the level of revenue needed that will permit equity stockholders the opportunity to earn a fair return on their investment in the utility.
Identifies a businessâ€™ return in relation to its equity capital. This measure is usually expressed as a percent. The ratio is defined as: Profit before Taxes/Net Worth. The higher the figure, the higher the productivity generated by a businessâ€™ management in relation to the businessâ€™ equity capital. However, a high return on equity may also be representative of the use of high leverage by a business.
Return on Equity (ROE) is a parameter for the calculation of the value creation of a company on the basis of equity. In order to determine the ROE, the result after tax is compared with the average booked equity.
An indicator of profitability, calculated as net profits after tax divided by ordinary shareholders' equity. Investors use ROE as a measure of how efficiently a company is using the money they have provided. Français: Rentabilité des fonds propres Español: Rendimiento del capital
The ratio (in percent) between the net profit and the average shareholders' equity for a financial year. A measure of profitability of equity indicating the return that a company achieves on the capital it employs.
Equity yield rate. The rate of return on the equity portion of an investment, taking into account periodic cash flow and the proceeds from resale. Considers the timing and amounts of cash flow after annual debt service, but not income taxes.
A ratio calculated by dividing the company's net income before common stock dividends are paid by the company's shareholder's equity. This ratio measures how much a company earns in relation to the amount invested in its common stock.
An amount, stated as a percentage, that informs common shareholders how effectively the funds invested are being utilized during a specific period. Trends can be found if current and prior periods are compared and if compared with industry composites, it shows whether or not the company is keeping up with its competitors. The rate is calculated by dividing net earnings by average stockholders' equity. See: Equity; Return
Return on Equity (ROE, Return on average common equity) measures the rate of return on the ownership interest (shareholders' equity) of the common stock owners. ROE is viewed as one of the most important financial ratios. It measures a firm's efficiency at generating profits from every dollar of net assets, and shows how well a company uses investment dollars to generate earnings growth.