Difference between revisions of "ROE"
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| − | 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]] | [[Category:finance]] | ||
Latest revision as of 19:25, 27 August 2020
ROE stands for Return On Equity. The ROE can be calculated as:
Where: = Total Assets (which is debt + equity) = Total Equity = Sales = Net Income
And:
- => Profitability
- => Asset turnover
- => Leverage