Return on Equity (ROE) (Investments & Retirement) - Definition, Examples, Advice | Bolder Money

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Definition

A measure of how effectively a company generates profits from its shareholders’ equity.

What to consider

Examine ROE to see how well a company uses shareholders’ funds.
Compare it with peers in the same industry.
Monitor trends to assess long-term profitability.

Real world scenarios

Before buying shares, Mark reviewed the company’s return on equity (ROE) to evaluate how well it was generating profits from shareholders’ investments.

Related terms

Investments & Retirement

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