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Return on equity (ROE) measures the rate of return for ownership interest (shareholders' equity) of common stock owners. It measures the efficiency of a firm at generating profits from each unit of shareholder equity, also known as ''net assets'' or ''assets minus liabilities''. ROE shows how well a company uses investments to generate earnings growth. ROEs 15-20% are generally considered good.〔 ==The formula== : 〔http://www.answers.com/topic/return-on-equity Answers.com Return on Equity〕 ROE is equal to a fiscal year net income (after preferred stock dividends, before common stock dividends), divided by total equity (excluding preferred shares), as a percentage. As with many financial ratios, ROE is best used to compare in the same industry. High ROE yields no immediate benefit. Since stock prices are most strongly determined by earnings per share (EPS), a 20% ROE company will cost twice the amount (in Price/Book terms) as a 10% ROE company. The benefit of low ROEs comes from reinvesting earnings to aid company growth. The benefit can also come as a dividend on common shares or as a combination of dividends and company reinvestment. ROE is less relevant if earnings are not reinvested. *The sustainable growth model shows us that when firms pay dividends, earnings growth lowers. If the dividend payout is 20%, the growth expected will be only 80% of the ROE rate. *The growth rate will be lower if earnings are used to buy back shares. If the shares are bought at a multiple of book value (a factor of ''x'' times book value), the incremental earnings returns will be reduced by that same facter (ROE/''x''). *New investments may not be as profitable as the existing business. Ask "what is the company doing with its earnings?" *ROE is calculated from the company perspective, on the company as a whole. Since much financial manipulation is accomplished with new share issues and buyback, the investor may have a different recalculated value 'per share' (earnings per share/book value per share). 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「return on equity」の詳細全文を読む スポンサード リンク
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