What is ROE (return on equity)?

ROE is net income divided by shareholders' equity (total equity), showing how much profit a company earned over a year using its shareholders' capital.

For example, if a company with total equity of KRW 100 million earned net income of KRW 10 million, its ROE is 10%. Because of the relationship ROE = PBR ÷ PER, it is often compared together with the PER and PBR.