Welcome to Indian Share Market
www.DayTradingShares.com
buy stock,buy back shares,buy and sell,best buy stocks,buy or sell sugar stocks,buy sell,online stock,buying selling,shares to buy,purchase,sell share,buy back,in India,prices,back,trading,buying,how to online prices,sharemarket sugar companies industries,news sugar industries shares tips,trading,how to invest in,investment in,learn share market price rates
investment,financial investment,companies,finance,funds,market,investment online services,return on investment,best,bond,bonds,corporate,bse India,bse live,market,bse trading,high return,high yield,advice,growth,information,opportunities,securities,strategy,long term trading,shares,stocks,stock market,bse sensex,value,delivery based trade,delivery based trading,delivery trade,delivery trading,short term,mid term,how to invest,investing,how to make money,internet business,financial planning,online business,nifty,nse India,nse live,online money making profit,investing online,make money on internet,quick,margin trading,opportunity,fund,program,nse trading,sensex,nifty,nse market
Your Desire to Earn
Home|Free Technical Charts|Free Advice|Useful Sites|Suggestions/Complaints|
Stocks for Investment|Readers|Our Target|Demat Account Opening|Free Subscription|Contact Us|
Disclaimer: Information presented on this site is a guide only. It may not necessarily be correct and is not intended to be taken as financial advice nor has it been prepared with regard to the individual investment needs and objectives or financial situation of any particular person. Stock quotes are believed to be accurate and correctly dated, but www.daytradingshares.com does not warrant or guarantee their accuracy or date.
www.daytradingshares.com takes no responsibility for any investment decisions based on recommendations provided on website.
Financial contents like Technical charts, historical charts and quotes are taken from NSE and Yahoo sites.
Note - All quotes are delayed by 15 minutes and unless specified.

Google Adsense Ads are posted on every page of the website so visitors clicking on Ads and going to those links and carrying any financial deal is not at all related to www.daytradingshares.com and any financial deal should be done on their own sole responsibility.
Please read at
www.daytradingshares.com/disclaimer.php before using any material or advice given at www.daytradingshares.com
Copyright © 2005-2012 DayTradingShares.com. All Rights Reserved
Understanding Return on Equity (ROE)
Understanding Return on Equity (ROE)

If you give some management teams a couple of boards and some glue, they can build a profitable growing business, while other teams canít make a profit with several billion dollars worth of assets.

Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings.

You calculate ROE by dividing Net Income by Book Value. A healthy company may produce an ROE in the 13% to 15% range.

Like all metrics, compare companies in the same industry to get a better picture.
While ROE is a useful measure, it does have some flaws that can give you a false picture, so never rely on it alone.

For example, if a company carries a large debt and raises funds through borrowing rather than issuing stock it will reduce its book value.

A lower book value means youíre dividing by a smaller number so the ROE is artificially higher.

There are other situations such as taking write-downs, stock buy backs, or any other accounting slight of hand that reduces book value, which will produce a higher ROE without improving profits.

It may also be more meaningful to look at the ROE over a period of the past five years, rather than one year to average out any abnormal numbers.

Given that you must look at the total picture, ROE is a useful tool in identifying companies with a competitive advantage.

All other things roughly equal, the company that can consistently squeeze out more profits with their assets, will be a better investment in the long run.