Real Estate Glossary

What is Return On Equity (ROE)?

Return on Equity (ROE) is a financial ratio that measures the profitability of a company in relation to the equity of its shareholders. It is calculated by dividing the company's net income by its shareholders' equity. A high ROE indicates that a company is generating a good return on the money invested by its shareholders. It's used to evaluate a company's performance, and to compare the performance of different companies.