Return on Equity. 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.

Use ROE in a sentence

You should always strive to get the greatest ROE you can any time you will be doing a long term project.

​ Was this Helpful? YES  NO 9 people found this helpful.

They were going to get a roe and that made the company pretty happy because they needed a lot of money back.

​ Was this Helpful? YES  NO 6 people found this helpful.

My boss tried to buy out another company because he thought they were not using their resources effectively and had a low ROE that he could improve.

​ Was this Helpful? YES  NO 11 people found this helpful.

Show more usage examples...

Mentioned in these terms

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Du Pont analysis DuPont identity