# ROE — Return on Equity

Net income divided by total equity.

## Definition

ROE measures the return generated for equity holders on the equity capital they've contributed and the company has retained.

## Formula

(Net Income ÷ Total Equity) × 100

## Why it matters

ROE is widely quoted but easy to manipulate via leverage — a company can lift ROE simply by funding itself with more debt. Always read ROE alongside debt-to-equity. Sustained 15%+ ROE without excessive leverage is a quality signal.

## How Standard Equity uses it

Shown in the main financial table and projected for current and next fiscal year using the clean-surplus relationship. For banks, insurers and broker-dealers the SE Grade's moat pillar also holds the moat back when the recent average ROE ranks low among comparable companies.

## The metric

| Category | Returns |
| -------- | ------- |
| Unit     | %       |

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