Ten Stock Analysis Ratios Used By The Pros: Return on Equity
Fifth Key Ratio :
Return on Equity
This is a key measure of efficiency. In crude terms, it is a measure of how well the board of a company is putting your money to work. A higher ROE indicates that the business is generating a higher proportion of profit for the resources they have at their disposal. It is extremely useful when comparing companies in the same industry, but not so much inter-sector due to the difference in capital requirements.