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How to interpret #ROE ( Return On Equity ) ?
Short Thread With Examples 🧵🧵
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Short Thread With Examples 🧵🧵
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1) We all know that Return on equity (ROE) is the measure of a company's net income divided by its shareholders' equity.
2)It basically tells us how efficiently a company is at converting its equity financing into profits.
2)It basically tells us how efficiently a company is at converting its equity financing into profits.
3) But it's very important to understand different drivers of Return on equity (ROE). Return on equity (ROE) is driven by three factors- net profit margin, asset turnover & financial leverage.
