Cluenex
Log inStart free
Glossary · Business quality

Return on equity

Net profit divided by shareholders’ equity.

Why it matters

Shows how hard shareholders’ money works. Debt can inflate it, so read it next to ROIC and debt levels.

How to read it

Buybacks shrink equity and can push ROE to extreme numbers. Over 300% is flagged as not meaningful.

Also called: ROE

Related

Return on invested capitalProfit earned on all the money invested in the business, from shareholders and lenders.Debt and cashWhat the company owes lenders, against the cash it holds.

In the Cluenex app, this explanation opens next to every return on equity figure, with the live reading for the stock you are looking at. Open it in Cluenex