Margins & Ratios

What is Return on Equity?

Profit earned for each dollar of shareholder equity.

How it is calculated

Net income divided by stockholders’ equity.

How to read it

Above 15% sustained is strong, but heavy buybacks or debt can inflate it by shrinking equity. Cross-check with ROIC.

Keep in mind

Computed on the period’s own figures, so quarterly values are a quarter of a year’s return.

Where the numbers come from

Scrutar computes Return on Equity from the figures each company reports to the SEC in its annual and quarterly filings, using the XBRL data attached to those filings.

More Margins & Ratios metrics

Gross MarginThe share of each dollar of revenue left after the direct cost of what was sold.How to read it →Operating MarginThe share of revenue that becomes operating profit after all running costs.How to read it →Net MarginThe share of revenue that ends up as net income.How to read it →Return on AssetsProfit earned for each dollar of assets the company controls.How to read it →Current RatioWhether near-term assets cover near-term obligations.How to read it →Debt/EquityHow much the company relies on money owed to others, lenders and suppliers alike, relative to shareholder money.How to read it →Quick RatioWhether the company can cover its near-term bills without selling inventory.How to read it →Asset TurnoverHow much revenue each dollar of assets generates.How to read it →

See it for a real company

Ten years of Return on Equity and every other metric on this page, for every company Scrutar covers, computed from SEC filings.

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