This in-depth Return on Equity (ROE) tutorial explains everything there is to know about ROE, from its definition to its formula, calculations, and interpretations. It also uses the Colgate Case Study to explain how to calculate Return on Equity in Excel.
You can download the Colgate Return on Equity template from this link – https://www.wallstreetmojo.com/ratio-analysis-template/
What is Return on Equity? (also known as Return on Total Equity)
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Return on Equity is a profitability indicator that compares a company’s profits to the value of its shareholders’ equity.
Formula
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Return on Equity Formula = Net Income /Shareholder’s Equity
Uses
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– The Return on Total Equity is useful for comparing the performance of businesses in the same industry.
– It also helps measure the management’s potential to generate income from the available equity.
For more details, you can refer to our article – https://www.wallstreetmojo.com/return-on-equity-roe/
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