Return on Equity

One of the 22 major business ratios used to evaluate a company’s performance. Return on equity measures the yield on the total equity position of the company. Please note, this does not measure the return on owner’s investment, return on owner’s investment is a subset of return on equity.

Performance Ratios

Performance Ratios

The most common thought among business owners, consultants, investors and students is the ‘bottom line’.  The proper word is of course ‘PROFIT’.  In business, the single number one reason to operate is to make a profit. 

Return on Equity

Return on Equity

Another performance ratio used in business is return on equity. It is similar to return on assets except return on equity uses one section of the bottom half of the balance sheet.

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