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Return on Equity is a term that reflects the net income to
every shareholder on the nominal shares holding. It is the most
important derivation calculated by dividing net income to the
total shareholders. The Net Income is derived after deducting
the various expenditures incurred by the company from the
gross income earned. It is reflection of the performance of the
company and the attractive fact for the prospect shareholders.
The various terminology involved in deriving the same are
majorly related to performance of business. The activities
carried out by the company and the income and expenses
related to the same. The money is raised through public offer
and by issuing preferences shares. The business image of the
company is reflected through the financial statement of the
company and it includes this formula at prime.
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