Definition
ROE. A measure of how well a company used reinvested earnings to generate additional earnings, equal to a fiscal year's after-tax income (after preferred stock dividends but before common stock dividends) divided by book value, expressed as a percentage. It is used as a general indication of the company's efficiency; in other words, how much profit it is able to generate given the resources provided by its stockholders. investors usually look for companies with returns on equity that are high and growing.
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'Return on Equity' appears in the definitions of these other terms on BusinessDictionary.com:
return on assets (ROA), key ratios, performance analysis, weighted average cost of capital
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