ROE

Return on equity: net income available to common shareholders for a period divided by average common equity over that period. It measures the accounting return relative to that equity base.

Also called Return on equity

ROE in round numbers

Hypothetical annual US$ millions: net income available to common shareholders is 2.85 and average common equity during the same year is 13.6. Assume no preferred claims. ROE is 2.85 ÷ 13.6 × 100 ≈ 21.0%, rounded to one decimal.

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Hypothetical annual ROE; US$m except return
MeasureValue
Common net income2.85
Average common equity13.6
ROE: income ÷ equity × 100≈ 21.0%

Leverage · Net income (bottom line) · All of the glossary