ROE
n. C / Un. Stands for Return on Equity. A way to measure how much profit a company makes compared to the money its owners have invested. It helps investors see if a business is using their money efficiently.
n. Abbreviation for Return on Equity. A financial ratio calculated by dividing net income by shareholders' equity. It is used as a measure of a corporation's profitability and the efficiency with which its capital is employed.
Investors look at the ROE to see if the company is profitable.
The analyst recommended the stock because the company maintained a high ROE despite the economic downturn.
While a high ROE is generally positive, it can sometimes be misleading if a company carries excessive debt, which artificially inflates the ratio by reducing the equity base.
Usually treated as an acronym (Return on Equity); often used with the definite article 'the' or as a modifier before another noun.