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.
So in this video, Ed Bowsher explains how to calculate 'return on equity'and why it could be useful to you.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
FCA car finance compensation: £700 each expected for 14 million driversEligible motorists could begin getting a payout from next year under the financial watchdog’s planned car finance compensation scheme
-
Reeves warned against property tax shake-up – 3 ways it could backfire on first-time buyersRachel Reeves reportedly has her eye on high-end property taxes in the upcoming Budget, but there are concerns a shake-up could unintentionally hamper those trying to get on the housing ladder
