The Return on Equity, or ROE, measures how efficiently a company uses Shareholders’ Equity to generate profits. It is calculated as the Net Profit for the year, divided by Average Book Value, or Equity, for the period. This is measured on a TTM basis and earnings are normalised.

Stockopedia explains ROE

This is defined as Income available to Common Shareholders (excluding Extraordinaries) divided by the Average Book Value over the period.

The DuPont formula is a common way to break down ROE into three important components. Essentially, ROE will equal the Net Margin multiplied by Asset Turnover multiplied by Financial Leverage.

Earnings are measured on a normalised basis.

Ranks: High to LowUnit: %Available in screenerAvailable as Table Column

The 5 highest ROE Stocks in the Market

NYQ:PBTPermian Basin Royalty Trust20152.4562
NYQ:MSIMotorola Solutions14447.6277
HKG:866China Qinfa12936.3131
NMQ:GPPGreen Plains Partners LP9521.7197
NYQ:NRTNorth European Oil Royalty Trust4469.5488