Return on Equity (ROE) is an amount, expressed as a percentage, earned on a company's common stock investment for a given period. It is calculated by dividing common stock equity (NET WORTH) at the beginning of the accounting period into net income for the period after preferred stock dividends but before common stock dividends. Return on equity tells common stock holders how effectively their money is being employed. Comparing percentages for current and prior periods reveals trends and comparison with industry composites reveals how well the company is holding its own against its competitors.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). return on equity (roe). Retrieved September 22, 2026, from http://smartdefine.org/return_on_equity_(roe)/definitions/1162476 |
| Chicago | Barry Goldsmith. 2010. "return on equity (roe)" http://smartdefine.org/return_on_equity_(roe)/definitions/1162476 (accessed September 22, 2026). |
| Harvard | Barry Goldsmith 2010, return on equity (roe), Smart Define, viewed 22 September, 2026, <http://smartdefine.org/return_on_equity_(roe)/definitions/1162476>. |
| MLA | Barry Goldsmith. "return on equity (roe)" 21 October 2010. Web. 22 September 2026. <http://smartdefine.org/return_on_equity_(roe)/definitions/1162476> |