ROE measures net income as a proportion of shareholders’ equity. As with ROCE we look for businesses able to generate significant profits with limited equity investment.
Return on Equity
= Net income/Shareholders’ equity
In theory, the definitions of an investment or an expense seem quite clear cut. An investment, so the theory goes, is spending which creates an asset which will help produce profits over a number of…
Conceptually we have a reasonable understanding of inflation. As an economic term, inflation represents the general price rise of goods and services over a predetermined time.
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