What is return on equity?

In this video, Ed Bowsher explains how to calculate return on equity, and why it could be useful to you.

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When you analyse a company, its easy just to focus on how much profit a company is making. But that can be a dangerous trap. A business might generate a decent profit, but still deliver a poor return on shareholders equity.

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Ed Bowsher
Ed Bowsher

Ed has been a private investor since the mid-90s and has worked as a financial journalist since 2000. He's been employed by several investment websites including Citywire, breakingviews and The Motley Fool, where he was UK editor.

 

Ed mainly invests in technology shares, pharmaceuticals and smaller companies. He's also a big fan of investment trusts.

 

Away from work, Ed is a keen theatre goer and loves all things Canadian.

 

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