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return on equity
(redirected from Return on net worth)

   Also found in: Financial, Acronyms, Wikipedia 0.01 sec.

return on equity

Relationship between a company's net profits and its shareholder's equity, expressed as a ratio. It is calculated by dividing total net profits by total shareholder equity, and multiplying by 100. The measure can be used as a benchmark to compare companies across industries. A percentage figure in the 10% to 35% range indicates a potentially healthy company. Higher numbers suggest rapid growth, and the company will need to maintain growth, or cut costs, to keep the figure high. The main drawback with ROE as a measure is that it takes no account of debt or gearing.



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6 per cent to 1 per cent and return on net worth will jump from 9.
Also known as return on net worth (RoNW), it represents the value of business for its shareholders after it has met all its financial obligations.
The KCMA study showed that cabinetmakers who outsourced more than half of their components had an average 25% return on net worth compared to only 12% for those integrated factories that produced most of their components in-house.
 
 
 
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