Return on equity (ROE) measures how much profit a company generates for each unit of shareholders' equity. It answers a simple question: how effectively is the company using the money its owners have invested? It's a core gauge of profitability and management efficiency.
ROE = Net Income / Shareholders' Equity
A higher ROE generally signals a more profitable, efficient company. Many investors look for sustained ROE above 15%. But very high ROE can also come from heavy debt rather than real efficiency, so it should be read alongside leverage.
If a company earns $20 million in net income on $100 million of shareholders' equity, its ROE is 20 / 100 = 20%. For every dollar of equity, it generates 20 cents of profit a year.
Fin Screener calculates ROE for each stock and includes it in both the analysis report and the screening filters, alongside ROA and ROIC for a fuller profitability picture.
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