Return on Equity (ROE) is a financial ratio that measures how well a company uses its equity to generate profit.
Return on Equity is calculated by taking a company's net income and dividing it by the company's total equity.
For example, if a company has $100 million in equity and $10 million in net income, its ROE is 10%.
Return on equity is a great metric to use when comparing companies in the same industry. If you're trying to decide between two companies in the same industry, you can use ROE to determine which one is more profitable.