IN PLAIN ENGLISH
Shows how efficient the company was with shareholder money over the last year.
FULL DEFINITION
Return on Equity Trailing Twelve Months. Measures profitability for the most recent 12-month period.
EXAMPLE
Net income of $1M on $5M equity over 12 months = 20% ROE (TTM).
HOW IT'S CALCULATED
ROE = net income ÷ shareholders' equity, over the trailing twelve months. Supplied by the market data provider. Note that heavy buybacks shrink equity and can inflate ROE without the business improving.
Educational content only. It is not personal financial advice.