Return on equity


Dernière mise à jour le :05/11/2019


Return on equity or ROE measures the capacity of the capital invested by shareholders and partners (equity) to achieve a certain level of profit.

Return on equity is equal to the ratio of the net self-financing capacity (net self-financing capacity = self-financing capacity decreases expenditure to maintain production potential intended for replacing production plant and covering operating risks) to equity (equity=share capital

+ issue, merger and share premiums, etc.;

+ revaluation adjustments;

+ mandatory reserve;

+ statutory or contractual reserves;

+ regulated reserves;

+ other reserves;

+ retained earnings;

+ result of the period;

+ investment subsidies;

+ regulated provisions).

Return on equity is a ratio intended only for shareholders, while return on assets concerns the performances of the company.