Financial Education

Return on Equity (ROE)

Net Income / Average Shareholders' Equity

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Fundamental

Return on Equity (ROE)

Net Income / Average Shareholders' Equity

Definition

ROE measures shareholder return on investment. Formula: Net Income / Average Shareholders' Equity. DuPont analysis decomposes ROE into margin, turnover, and leverage components.

Related Topics

#shareholder returns #profitability #dupont analysis #leverage

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Category: Fundamental

Fundamental analysis examines a company's financial health, management quality, and market position to determine intrinsic value.

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