What is the difference between ROE(Return on Equity) and
ROCE(Return on Capital Employed)?
Answer Posted / vinaya
Return on equity (ROE) measures the rate of return on the ownership interest (shareholders' equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE shows how well a company uses investment funds to generate earnings growth. ROEs between 15% and 20% are considered desirable
ROE= Net income after tax/ shareholder equity
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