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Key Performance Indicators (KPI)
book

Key Performance Indicators (KPI)

by Bernard Marr
September 2012
Intermediate to advanced
376 pages
6h 44m
English
FT Publishing International
Content preview from Key Performance Indicators (KPI)

12

Return on equity (ROE)

Strategic perspective

Financial perspective

Key performance question this indicator helps to answer

How efficiently are we using the investments that shareholders have made to generate profits?

Why is this indicator important?

Following on from the previous KPIs, return on equity (ROE) is another common measure of company profitability. ROE measures how much profit a company is generating from the money shareholders have invested.

Many analysts consider ROE the single most important financial ratio for investors and the best measure of management team performance.

Companies with a high ROE (especially if they have little or no debt – see also ROA or the debt to equity ratio) are able to grow without large capital ...

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Publisher Resources

ISBN: 9780273750116