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How to Recognize Deferred Revenue
Understanding Return on Equity
How to Calculate Dividend Yield
How to Calculate Days Payable
How to Prepare a Company Bank Reconciliation
Evaluating Accounting Software
Posting to Ledgers
Calculating Percentage Increases
How to Create an Income Statement
How to Implement an Accounting System
How to Make a Budget
How to Perform an External Audit-Accounting Supplemental-Program Stream
Calculating a debt to equity ratio means looking at total liabilities and dividing them by the amount of m… More
Return on Equity is a profitability ratio used by analysts and investors to gauge the performance of manag… More
In order to calculate a debt-to-income ratio, calculate monthly income, monthly expenses and divide the ex… More
Using an equity loan to pay off debt is a last resort for those who desperately need the loan. Pay off deb… More
Stockholder equity is ownership by the people who own shares in a company. Stockholder equity allows share… More
By investing in an equity fund, become a share owner in a company. Discover more about equity funds with e… More
Home equity valuation is determined by calculating the difference between a mortgage loan and the value of… More
An equity security is a security that someone will have equity in a company, in which possessed shares are… More
Return on Equity (ROE) is a calculation that determines the profitability of a company based on return of … More
Ways to build equity include paying home loans on time every month and hoping the housing market value goe… More
The Loan-to-Value (LTV) ratio of a loan refers to the value of the property or the purchase price, compare… More
The modern world revolves around credit. Being able to get what you want now and pay for it later not only… More
A return on equity can be calculated by dividing the net income by the average shareholder's equity. Find … More
Most people believe that the only way to build equity their home is to pay off the mortgage loan. That is … More
Usually when a person refinances an equity line of credit, they combine it with a new first mortgage refin… More
Summary: A return on equity can be calculated by dividing the net income by the average shareholder's equity. Find out how to determine how well management is using funds from shareholders with information from a certified public accountant in this free video on accounting.
Miranda Chook is a CPA with expertise in international operations. She has held executive positions with both publicly listed and privately held companies. In addition to her finance...read more
"My name's Miranda Chook, and I'm a CPA. There are many ways to analyze a financial statement and ratios are one good way of doing this, and one of the more common ratios is the return on equity. And the return on equity is one way to quantify how well management is using funds that are invested by shareholders to generate returns. The actual calculation is net income divided by average shareholder's equity. And you can calculate average shareholder's equity by simply taking that balance from the beginning of the period and the ending of the period and dividing by two. Over time, the value of a company's equity will depend on the relationship between its return on equity and its cost of capital. Generally speaking, if a company's return on equity is greater than its cost of capital then the company's market value should be greater than its book value. Now, this is just one ratio that needs context to be more meaningful and to be actionable, so compare it to prior periods; compare it to other companies in its industry. Then, you'll be able to get a better idea of how well the company is doing."
eHow Article: Understanding Return on Equity
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