Wednesday, July 12, 2006

 

ROE vs ROA


What is ROE?


Return on Equity = (Annual Net Income / Average Shareholders' Equity) x 100%


What is ROA?

Return on Assets = (Annual Net Income / Total Assets) x 100%


The Major Difference

Total Assets = Liabilities + Shareholders' equity


See http://www.investopedia.com/articles/basics/05/052005.asp for details.

Comments: Post a Comment



<< Home

This page is powered by Blogger. Isn't yours?