Benchmarks: Return on Equity
Return on Equity (ROE) measures a company's profitability in
relation to the book value of Shareholders" Equity.
ROE is a measure of how effectively management makes investments to
generate earnings growth for shareholders.
ROE = Net Income / Average Total Equity
where Net Income is adjusted for non-recurring gains and
expenses and Average Total Equity is the average of
starting and ending book value of
Shareholders" Equity.