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Shareholder assets (given return on equity and net income before tax)
Formula
SA
shareholder assets
ROE
return on equity
NI
net income(before tax)
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.