Return on Common Equity is a way to measure how profitable a company is for its common shareholders. It shows how much net income a company earns for every dollar of common equity invested. Common equity is the amount of money that common shareholders have contributed to the company, plus any retained earnings. Return on Common Equity can help investors and analysts compare the performance of different companies and evaluate how well a company uses its common equity to generate profits. The formula for Return on Common Equity is:
Return on Common Equity = (TTM Net Income Available for Common Shareholders / Average Common Equity) * 100
Where:
- TTM Net Income Available for Common Shareholders is TM001,
ttm_net_inc_avai_com_share
- Average Common Equity (R0132,
tot_common_eqy) is the average of the common equity at the beginning and end of the period.