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Net income before tax (given return on equity and shareholder assets)
Formula
NI
net income(before tax)
ROE
return on equity
SA
shareholder assets
Formula description
Return on equity (ROE) measures the rate of return on the ownership interest of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE shows how well a company uses investment funds to generate earnings growth. ROEs between 15% and 20% are considered desirable.