The formula for ROA is almost the same as ROE, but it uses total assets in the denominator whereas ROE uses shareholders' equity. Return on invested capital (ROIC) also measures profitability ...

Investors seeking to analyze how executive management is performing and how much a company is earning relative to book value turn to a profitability ratio known as return on equity. From an ...

The traditional formula for the cost of equity is the dividend capitalization model and the capital asset pricing model (CAPM). The cost of equity is the return that a company requires for an ...

The ROE formula is net income divided by shareholders ... Since this can be deceptive, he suggests using return on debt plus equity, called return on capital, for companies with a high debt ...

Investopedia / Xiaojie Liu Invested capital is the total amount of money raised by a company by issuing securities to equity shareholders and debt to bondholders. Return on invested capital (ROIC ...

Capital Asset Pricing Model (CAPM) The CAPM formula is: Cost of Equity (CAPM) = Risk-Free Rate of Return + Beta × (Market Rate of Return – Risk-Free Rate of Return) ...

"The formula uses the cost of each of the sources of capital and weighs them relevant ... calculating a company's WACC. The cost of equity is the return that a business pays out to its equity ...

The cost of equity reflects the return shareholders expect ... costs of both debt and equity in the company’s capital structure. The WACC formula is: Factors that affect the cost of capital ...

While some investors are already well versed in financial metrics (hat tip), this article is for those who would ...