Difference between revisions of "ROE"

Latest revision as of 19:25, 27 August 2020

ROE stands for Return On Equity. The ROE can be calculated as:

${\text{ROE}}={\frac {NI}{S}}\cdot {\frac {S}{TA}}\cdot {\frac {TA}{EQ}}$

Where: $TA$ = Total Assets (which is debt + equity) $EQ$ = Total Equity $S$ = Sales $NI$ = Net Income

And:

@@ Line 1: / Line 1: @@
-ROE
+ROE stands for '''''Return On Equity'''''. The ROE can be calculated as:
+<math>\text{ROE} =  \frac {NI}{S} \cdot \frac{S}{TA} \cdot \frac{TA}{EQ}</math>
+Where:
+<math>TA</math> = Total Assets (which is debt + equity)
+<math>EQ</math> = Total Equity
+<math>S</math> = Sales
+<math>NI</math> = Net Income
+And:
+* <math>\frac {NI}{S}</math> => Profitability
+* <math>\frac{S}{TA}</math> => Asset turnover
+* <math>\frac{TA}{EQ}</math> => Leverage
 [[Category:finance]]