What is ROE? What is the formula for calculating ROE? What are the differences between ROE, ROA, and ROI? How do you select stocks using ROE? How can you verify the ROE rankings of Japanese, US, and Hong Kong stocks in 2023? This article will provide a detailed explanation of these questions.
What is ROE?
ROE is an abbreviation for Return on Equity and is also referred to as the shareholder equity profitability ratio. It is the ratio of net income to shareholders' equity, indicating how efficiently a company is utilizing shareholder equity to generate profits.
The higher this indicator, the greater the profitability from the investment. ROE represents the ability to generate net profit using equity. Generally, an increase in debt affects ROE.