Return on Equity (ROE)
Return to business owners on their investment. Shows how many cents of profit you generate for each dollar of owner equity. Higher ROE means better returns to owners.
- How it's worked out
- (Net Profit / Total Equity) × 100
- Which way is better
- Higher is betterHigher is better for cash.
Written by Mandy Walker, founder of Focus on Cash. Updated October 2026. This explanation comes from the glossary inside Focus on Cash, so it matches the words you see in the app.
Related measures
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