Glossary
With over 200 terms in both English and French, our M&A Dictionary is designed to help you better understand the key words and concepts related to the sale oe purchase of a business in Canada.
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Return on Equity
« Back to Glossary IndexCategory: Accounting and Finance
A financial metric that evaluates the profitability of an investment in relation to the equity invested. Calculated by dividing net income by shareholders’ equity, ROE provides insights into how effectively a company generates profits from its shareholders’ investments. For acquirers in M&A, analyzing the target company’s ROE is crucial as it helps assess the efficiency of capital utilization and the potential return on the equity investment. A high ROE indicates strong profitability relative to equity, while a low ROE may warrant further investigation into the company’s operational efficiency.
« Back to Glossary IndexAcronym:
ROE
French Translation: