The amount of profit earned in a period (without the effects of depreciations etc) in relation to total shareholders funds (Capital, Retained earnings, current earnings)

Check your return on equity with Jazoodle now.

Definition used:

Your company’s ROE is calculated by the following:

total net profit

divided by

Total shareholder’s funds (Share capital, Retained Earnings and current earnings)

Your equity return can be improved in a number of ways, including:

• Improve sales revenues from profitable product lines
• Reduce internal process inefficiencies
• Negotiate more favourable direct goods supplies
• Reduce non productive overheads
• Ensure your expenses are managed effectively
• Manage your capital structure accordingly