What is a stock's return on equity (ROE), and how is it calculated?
Asked by Franziska Last Modified
Follow 1 
Answer 
The Stock's return on equity that is ROE is nothing but a simple ratio which tells us how much company is generating profits out of its equity capital. A higher ROE tells us that the company is earning good profits. ROE= Net Income/ shareholder’s equity
0
Comments
Khalid
Professional Stocks and Forex trader with 4 years of experience.
A stock's Return on Equity (ROE) is a financial metric indicating the profitability of a company in relation to its shareholders' equity. It is calculated by dividing the net income by the average shareholders' equity. The formula for ROE is: \ ROE provides insights into how efficiently a company utilizes...
read more A stock's Return on Equity (ROE) is a financial metric indicating the profitability of a company in relation to its shareholders' equity. It is calculated by dividing the net income by the average shareholders' equity. The formula for ROE is: \[ ROE = \frac{\text{Net Income}}{\text{Average Shareholders' Equity}} \] ROE provides insights into how efficiently a company utilizes equity capital to generate profits, and a higher ROE is generally considered favorable. read less
0
Comments
Related Questions
How we can select stocks in share market? 
first of all we have to check sector performance then we have to select concerned stock after observing the particular company ratio analysis and technicals and company growth in near future then only we have to purchase the any company of share
16 What are the stock market trading hours?
9:00 am to 3:30 pm for commodity market 9:00 am to 11:30 pm
What are the main problems with technical indicators in stock market analysis?
1) All Indicators are laging. 2) are not unique acording to personal trading style.
What's the best way to learn about stock trading strategies?
First learn Technical Analysis from any Expert specifically from any Professional Trader. Along with this read books on “Trading Psychology”. After the completion of course, make your own “Trading...
How much money do I need for day trading?
For day trading you can start with a minimum of 10,000Brokers can give 4 times of trading margin. so then you have up to 40,000 for day trading.
Now ask question in any of the 1000+ Categories, and get Answers from Tutors and Trainers on UrbanPro.com
Ask a QuestionRelated Lessons
Why did Bhageria Industries share rise rapidly since last one year?
Bhageria Industries Ltd “Bhageria Industries Limited, formerly Bhageria Dye-Chem Limited, is engaged in the manufacturing and sale of chemicals, dyes and dyes intermediates required for dye manufacturers...
How do I short sell a stock?
How do I short sell a stock? To sell a stock short, you follow four steps: Borrow the stock you want to bet against. ... You immediately sell the shares you have borrowed. ... You...
What is hedging and why is hedging important in trading and investment?
The literal meaning of hedge is protective compound wall built around the house/ the property. In trading & investment, Hedging is done to minimize the losses and protect the profit earned from fluctuation...
All You Know About Indian Stock Market-Introduction
At present Indian two stock exchanges, BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) are life time high. BSE and NSE are two stock exchanges where stock trades are happening. BSE is the...
Lagging Indicators, Learning Cards for a Wise Trader
Lagging indicators Lagging indicators are mostly derived using an average of previous price action data. So think of moving averages indicators as you feel about Lagging indicators, for example- Simple...
Find Stock Market Trading Classes near you
Looking for Stock Market Trading Classes?
Learn from the Best Tutors on UrbanPro
Are you a Tutor or Training Institute?
Join UrbanPro Today to find students near you
