ROE: return on equity
ROE is annual net income divided by shareholders' equity. It shows how much profit the business earns on each dollar of shareholders' money. A high ROE is good unless it is inflated by debt or share buybacks.
Formula
How to read it
- Above 15% suggests a strong business, as many investors see it.
- A very high ROE: check the equity. When a company buys back its shares for years or borrows heavily, book equity shrinks and ROE inflates to hundreds of percent. The business does not get better because of it.
- Read it with debt and ROA. Return on assets does not depend on how much debt the company has.
Live exampletrailing 12 months · data as of Nov 5, 2026
When ROE is many times higher than ROA, equity is small relative to assets: that comes from debt or years of buybacks.
Rows in the terminal
Return on Common Equity (TTM) — return on equity
How much profit each dollar belonging to shareholders brings. The trap is in the denominator: buybacks and past losses shrink equity and inflate ROE, which is why it is read next to ROA and debt.
ROE Growth (YoY) — return on equity growth
What changes is not earnings but the return on equity itself. Growing — every dollar a shareholder put in now brings more than before.
Frequently asked questions
How is ROE different from ROA?
ROE is measured on shareholders' money, ROA on all assets, including those bought with debt.
Why is bank ROE lower than tech ROE?
Regulators require banks to hold a lot of capital. For a bank, 10–15% is a good result.
Related terms
All 109 metrics for every stock, compared with its sector — in the terminal
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