ROE

ROE
return on equity (ROE)
A measure of the return realized by the owners of an enterprise. Calculated by dividing an enterprise's annualized net income by its average capital for the period. Alternatively, it can be calculated by multiplying the enterprise's ROA by its leverage/equity multiplier. ROE indicates how effectively the enterprise is using its capital to produce income. American Banker Glossary
————

* * *

   Return on Equity.
   The ratio of a company's profit to its shareholders' equity, expressed as a percentage. It is the most widely used measure of how well management uses shareholders' funds.
   Its main advantage is that it is a benchmark that allows investors to compare the profitability of hugely differing industries. Investors do not care whether their holdings are in low-margin retailers or high-margin technology companies, as long as they produce an above-average ROE.
   Its main flaw is that it ignores the debt side of the company's funding and thus fails to measure the amount of risk involved in obtaining a given amount of earnings. A high ROE can be due to high earnings or low equity, therefore it is always wise to keep an eye on the company's leverage (as measured by its debt/equity ratio).
   ROE ratios for healthy companies range between 10 and 25 percent. Most investors look for companies with double-digit ROEs, or at least higher than the return on a risk-free investment such as a government bond. Companies earning high ROEs will typically attract competition into their market segment and need to keep growing and/or cutting costs to maintain double-digit ROE levels.
   Formula: Attributable Profit/Shareholders' Equity x 100 Example
   In the last complete financial year The Old Rope Corporation had attributable profit of £64 million and shareholders' equity of £300 million.
   ROE: 64/300 x 100 = 21.33 percent
   ► See also Assets, EPS, Shareholders' Funds.

* * *

ROE UK US noun [U] FINANCE, ACCOUNTING
► ABBREVIATION for RETURN ON EQUITY(Cf. ↑return on equity)

Financial and business terms. 2012.

Игры ⚽ Поможем написать реферат
Synonyms:
(Capreolus Caprooe) / ,


Look at other dictionaries:

  • Roe — or hard roe is the fully ripe internal ovaries or egg masses of fish and certain marine animals, such as shrimp, scallop and sea urchins. As a seafood roe is used both as a cooked ingredient in many dishes and as a raw ingredient.Caviar is a name …   Wikipedia

  • Roe — ist der Familienname folgender Personen: Alliott Verdon Roe (1877–1958), britischer Luftfahrtpionier Allison Roe (* 1956), neuseeländische Langstreckenläuferin Bartholomew Roe (1583–1641), englischer Benediktiner, Märtyrer Channon Roe (* 1971),… …   Deutsch Wikipedia

  • RoE — Retention of Employment Model (RoE) England, Wales A model that allows public sector employees to opt out of the transfer of their employment to a private sector provider under TUPE. Under the RoE model, staff remain public sector employees and… …   Law dictionary

  • roe — Ⅰ. roe [1] ► NOUN 1) (also hard roe) the mass of eggs contained in the ovaries of a female fish or shellfish, especially when ripe and used as food. 2) (soft roe) the ripe testes of a male fish, especially when used as food. ORIGIN related to Low …   English terms dictionary

  • roe — the deer [OE] and roe ‘fish eggs’ [15] are distinct words. The former goes back to a prehistoric Germanic *raikh , which also produced German reh, Dutch ree, Swedish råa, and Danish raa. Its underlying meaning may be ‘spotted’, an allusion to the …   The Hutchinson dictionary of word origins

  • roe — the deer [OE] and roe ‘fish eggs’ [15] are distinct words. The former goes back to a prehistoric Germanic *raikh , which also produced German reh, Dutch ree, Swedish råa, and Danish raa. Its underlying meaning may be ‘spotted’, an allusion to the …   Word origins

  • ROE — is:* Return On Equity, an economics acronym * Royal Observatory, Edinburgh, Scotland * Rubies of Eventide, an online game acronym * Rules of engagement, a military acronym * [http://wiki.xiph.org/index.php/ROE Rich Open multitrack media… …   Wikipedia

  • Roe — Roe, AR U.S. town in Arkansas Population (2000): 124 Housing Units (2000): 56 Land area (2000): 0.194814 sq. miles (0.504567 sq. km) Water area (2000): 0.000000 sq. miles (0.000000 sq. km) Total area (2000): 0.194814 sq. miles (0.504567 sq. km)… …   StarDict's U.S. Gazetteer Places

  • Roe, AR — U.S. town in Arkansas Population (2000): 124 Housing Units (2000): 56 Land area (2000): 0.194814 sq. miles (0.504567 sq. km) Water area (2000): 0.000000 sq. miles (0.000000 sq. km) Total area (2000): 0.194814 sq. miles (0.504567 sq. km) FIPS code …   StarDict's U.S. Gazetteer Places

  • roe — roe1 [rō] n. [ME rowe, rowne, akin to (or < ?) ON hrogn, akin to OHG rogo < IE base * krek > Latvian kur̂kulis, frog s eggs] 1. fish eggs, esp. when still massed in the ovarian membrane 2. the swollen ovaries or expelled eggs of certain… …   English World dictionary

  • Roe — Roe, n. [OE. ro, AS. r[=a]h; akin to D. ree, G. reh, Icel. r[=a], SW. r[*a].] (Zo[ o]l.) (a) A roebuck. See {Roebuck}. (b) The female of any species of deer. [1913 Webster] …   The Collaborative International Dictionary of English

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”