In corporate finance, the Return On Equity (ROE) is an index of the profitability of equity. It summarises the business results of the company. It is a percentage index by which the net income produced is compared to the net capital or equity, in other words to the directly owned resources. In order to assess whether a given value of ROE is good or bad, it is necessary to compare it with the yield on alternative investments (BoT, CcT, bank deposits, etc.), that is to assess the opportunity cost of investing in the company in question.
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