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URL:  https://boards.fool.com/do-you-know-what-roe-means-why-would-you-want-it-33612398.aspx

Subject:  Re: My Basic Principle Date:  3/15/2008  10:23 PM
Author:  FleaBagger Number:  35622 of 550

Do you know what ROE means? Why would you want it under 1? Is that a typo?

In case that's not a typo and you don't know what it means, ROE is "Return On Equity," or one year's profit divided by the average shareholder equity for that year, usually expressed as a percentage. A higher ROE is usually taken to indicate a more efficient use of resources at management's disposal, though ROE can be inflated (some would argue "enhanced") using debt. If you control for debt, a high ROE can be a very good attribute to find in a company.


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