Return on Equity
Earnings divided by equity.
The idea is that this tells you the number of dollars of profits the company can earn for each dollar of shareholders' equity;
but Return on Assets is probably a better number to look at.
(After all, their profitability is a function of all assets they control, not just of the equity portion of assets.
Note that ROE is bigger than ROA, since equity is a subset of assets).
|
