GLOSSARY

ROE (Return on Equity)

Profitability & Efficiency

IN PLAIN ENGLISH

A score for management. It shows how good they are at turning shareholders' money into more profit.

FULL DEFINITION

A measure of financial performance calculated by dividing net income by shareholders' equity.

EXAMPLE

ROE of 20% means for every £1 shareholders put in, the company generated 20p of profit.

Educational content only. It is not personal financial advice.