What is ROE (Return on Equity)?
ROE measures how effectively a company uses shareholders' equity to generate profits — the ultimate test of whether management is creating value for owners.
Formula
ROE = Net Income ÷ Shareholders' Equity × 100
How to Interpret
Consistently high ROE (>15%) over 5+ years suggests a durable competitive advantage. Be cautious of high ROE driven by excessive debt.
Typical Ranges
Above 15% is good, above 20% is excellent. Compare within sector.
Find Stocks Using This Metric
Use the Equiscale Stock Screener to filter Indian stocks by ROE.
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