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The return on equity (ROE) is a measure of the profitability of a business in relation to its equity; [1] where: . ROE = Net Income / Average Shareholders' Equity [1] Thus, ROE is equal to a fiscal year's net income (after preferred stock dividends, before common stock dividends), divided by total equity (excluding preferred shares), expressed as a percentage.
Return on tangible equity (ROTE) (also return on average tangible common shareholders' equity (ROTCE)) measures the rate of return on the tangible common equity. ROTE is computed by dividing net earnings (or annualized net earnings for annualized ROTE) applicable to common shareholders by average monthly tangible common shareholders' equity. [1]
Return on capital employed is an accounting ratio used in finance, valuation, and accounting. It is a useful measure for comparing the relative profitability of companies after taking into account the amount of capital used.
Return on equity (ROE) and return on assets (ROA) determine how efficient a company can be at generating profits. Both formulas that can help investors determine how good a company is at turning a ...
Return on equity (ROE) [14] Net Income / Average Shareholders Equity Return on assets (ROA ratio or Du Pont Ratio) [6] Net Income / Average Total Assets Return on assets (ROA) [15] Net Income / Total Assets Return on assets Du Pont (ROA Du Pont) [16] Net Income / Net Sales · Net Sales / Total Assets ...
Arithmetic return: average return of different observation periods; Geometric return: return depending only on start date and end date of one overall observation period; Rate of return or return on investment; Total shareholder return: annualized growth in capital assuming that dividends are reinvested
The company's operating income margin or return on sales (ROS) is (EBIT ÷ Revenue). This is the operating income per dollar of sales. [EBIT/Revenue] The company's asset turnover (ATO) is (Revenue ÷ Average Total Assets). The company's equity multiplier is (Average Total Assets ÷ Average Total Equity). This is a measure of financial leverage.
Invested in a conservative portfolio returning 5% annually — the historical average return on stocks is 11.9% — that money would grow to $384,031 in three years.