RETURN ON EQUITY

abhishreshthaa

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Significance:

1. The ratio shows what percentage dose the earnings bear to the amount of capital invested by equity shareholders.


2. The ratio suggests the character of the management in general and trends in this ratio provide valuable guidance to investors. The ratio control market value of the stock.


3. The ratio is also used to compare the performance of a companies equity capital with those of the other companies.
 
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