Return on Equity

ROE tells you how well your company is using shareholder's equity -- potentially your own equity --
to generate profits. Take net income from the income statement and divide it by the shareholder's
equity from the balance sheet to attain ROE. The ratio is tracked over time -- computing the figure
quarterly or yearly -- to see if return on equity is increasing or decreasing. An increasing ROE is
preferable as it shows the company is more efficiently using shareholder's equity to produce profits.
Business owners typically want to maximize ROE to sustain or attract investors. Asset turnover, or
sales-to-asset ratio, shows how efficiently your company is converting its assets into sales. Find your
company's sales on the income statement and divide it by total assets from the balance sheet. The
higher the ratio the better; a reading of one or higher indicates the company is generating more than
$1 in sales for each $1 in assets. New start-ups may take time to generate significant sales, therefore
track the quarterly or yearly trend of the figure. A rising asset turnover ratio over time shows assets
are being utilized more effectively. Asset turnover, or sales-to-asset ratio, shows how efficiently your
company is converting its assets into sales. Find your company's sales on the income statement and
divide it by total assets from the balance sheet. The higher the ratio the better; a reading of one or
higher indicates the company is generating more than $1 in sales for each $1 in assets. New start-ups
may take time to generate significant sales, therefore track the quarterly or yearly trend of the figure.
A rising asset turnover ratio over time shows assets are being utilized more effectively. Asset
turnover, or sales-to-asset ratio, shows how efficiently your company is converting its assets into
sales. Find your company's sales on the income statement and divide it by total assets from the
balance sheet. The higher the ratio the better; a reading of one or higher indicates the company is
generating more than $1 in sales for each $1 in assets. New start-ups may take time to generate
significant sales, therefore track the quarterly or yearly trend of the figure. A rising asset turnover
ratio over time shows assets are being utilized more effectively. Asset turnover, or sales-to-asset
ratio, shows how efficiently your company is converting its assets into sales. Find your company's
sales on the income statement and divide it by total assets from the balance sheet. The higher the
ratio the better; a reading of one or higher indicates the company is generating more than $1 in sales
for each $1 in assets. New start-ups may take time to generate significant sales, therefore track the
quarterly or yearly trend of the figure. A rising asset turnover ratio over time shows assets are being
utilized more effectively. Asset turnover, or sales-to-asset ratio, shows how efficiently your company
is converting its assets into sales. Find your company's sales on the income statement and divide it by
total assets from the balance sheet. The higher the ratio the better; a reading of one or higher
indicates the company is generating more than $1 in sales for each $1 in assets. New start-ups may
take time to generate significant sales, therefore track the quarterly or yearly trend of the figure. A
rising asset turnover ratio over time shows assets are being utilized more effectively.