In this video we discuss what is Return on Equity? formula to calculate return on equity along with some practical examples. 𝐖𝐡𝐚𝐭 𝐢𝐬 𝐑𝐞𝐭𝐮𝐫𝐧 𝐨𝐧 𝐄𝐪𝐮𝐢𝐭𝐲 𝐅𝐨𝐫𝐦𝐮𝐥𝐚? ------------------------------------------------------------ It is one of the most common finance formulas which are used by shareholders to find out the return on their investment. 𝐑𝐞𝐭𝐮𝐫𝐧 𝐨𝐧 𝐄𝐪𝐮𝐢𝐭𝐲 𝐅𝐨𝐫𝐦𝐮𝐥𝐚 --------------------------------------------- Here’s the formula of return on equity ratio. Return on Equity (ROE) = Net Income / Shareholders Equity 𝐑𝐞𝐭𝐮𝐫𝐧 𝐨𝐧 𝐄𝐪𝐮𝐢𝐭𝐲 (𝐑𝐎𝐄) 𝐄𝐱𝐚𝐦𝐩𝐥𝐞 -------------------------------------------------------- Siemens Co. has the following information – Net Income for the year 2016 – $240,000 Shareholders’ Equity – $800,000 Here we need to find out the Return on Equity i.e ROE of the SIEMENS company. Here using the ROE Formula, we get Return on Equity = Net Income / Shareholders’ Equity Net Income = $240,000 Shareholders’ Equity = $800,000 Return on Equity = $240,000 / $800,000 Return on Equity = 30% So the Return on Equity (ROE) of the SIEMENS company is 30% To know more about the 𝐑𝐞𝐭𝐮𝐫𝐧 𝐨𝐧 𝐄𝐪𝐮𝐢𝐭𝐲 (𝐑𝐎𝐄) 𝐅𝐨𝐫𝐦𝐮𝐥𝐚, you can go to this 𝗹𝗶𝗻𝗸 𝗵𝗲𝗿𝗲:- https://www.wallstreetmojo.com/return-on-equity-roe-formula/ Subscribe to our channel to get new updated videos. Click the button above to subscribe or click on the link below to subscribe - https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1