particular share ? and how ROE is calculated ?
Experts..., please express your knowledge on ROE.
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xhora wrote:ROE is calculated as
ROE = (Profit after tax / Shareholders fund) X 100%
e.g Using RICH latest 31/03/2011 Reports
Profits after tax = 2,140,582
Shareholders Fund = (Stated Capital+Capital reserves+Revenue reserves+Foreign currency translation) = 5,002,929
So ROE = 2,140,582/5,002,929 X 100% = 42.78%
ROE can be interpreted as the efficiency of the company in using shareholders fund to generate income. there is ideal ROE value but anything above 20% is generally considered good
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