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Return On Equity (ROE)
ROE is used to compare the profitability of a company to other in the same industry.
It calculates how much profit a company generates with each shareholders equity.
Formula :
It calculates how much profit a company generates with each shareholders equity.
Formula :
ROE = Net Income / Share holders Equity
What is Earning Per Share (EPS) ?
Earning Per Share is nothing portion of company profit allocated to one share of stock. In other words amount of net income earned per share.
Formula :
EPS = ( Net Income - Preferred Dividends ) / Weighted Average common shares outstanding
Formula :
EPS = ( Net Income - Preferred Dividends ) / Weighted Average common shares outstanding
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